EC published the Delegated Regulation (EU) 2019/981 that amends the Regulation (EU) 2015/35, which supplements Solvency II Directive (2009/138/EC) on the taking-up and pursuit of the business of insurance and reinsurance. These new rules under Solvency II will make it easier for insurers to provide financing to companies, including small and medium enterprises (SMEs). Regulation (EU) 2019/981 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Points (50), (59) to (61), (66) and (74) of Article 1 of Regulation (EU) 2019/981 shall apply from January 01, 2020.
The current level of capital requirements makes it costly for insurers to finance SMEs, particularly in the case of long-term equity investments and private debt. Insurers providing finance via such instruments, which should help mobilize private-sector investment, is a key objective of the Capital Markets Union. Regulation (EU) 2019/981 introduces simplifications for the calculation of capital requirements by insurance companies as well as alignments between rules for banking and the insurance sector. This will reduce the regulatory burden for insurers without jeopardizing the safety of the sector. Further revisions of technical nature in the delegated regulation ensure that the rules remain fit for purpose. A more fundamental review of Solvency II is due by the end of 2020. Preparatory work for that review is ongoing. In line with the objectives of the Capital Markets Union, further analysis on remaining obstacles to investments in the real economy will be undertaken.
Effective Date: July 08, 2019
Keywords: Europe, EU, Insurance, Securities, Solvency II, Capital Requirements, Capital Markets Union, Regulation 2019/981, Regulation 2015/35, SCR, EC
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.