Featured Product

    EIOPA Issues Statement on Mitigating Impact of COVID-19 on Insurers

    March 17, 2020

    EIOPA published a statement outlining actions toward mitigating the impact of COVID-19 on the insurance sector in EU. EIOPA emphasized that insurance companies should be ready to implement the necessary measures to ensure business continuity and the national competent authorities should be flexible regarding the timing of supervisory reporting and public disclosure for the end of 2019. EIOPA plans to coordinate the specifics of the approach with the competent authorities. In the short term, EIOPA will limit its requests of information and the consultations to the industry to essential elements needed to assess and monitor the impact of the current situation in the market. EIOPA is also extending the deadline of the Holistic Impact Assessment for the 2020 Solvency II Review by two months, to June 01, 2020.

    In the coming days, EIOPA will communicate details on postponing additional reporting and information requirements. Furthermore, the Solvency II framework includes a number of tools that can be used to mitigate risks and impact to the sector. EIOPA and the national competent authorities stand ready to implement these tools, if and when necessary, in a coordinated manner, to ensure that policyholders remain protected and financial stability is safeguarded. Nevertheless, insurance companies should take measures to preserve their capital position in balance with the protection of the insured, following prudent dividend and other distribution policies, including variable remuneration. Notwithstanding existing tools and powers, and together with national authorities and the other ESAs and ESRB, EIOPA will continue to monitor the situation and will take or propose to EU institutions any measure necessary to mitigate the impact of market volatility to the stability of the insurance sector in Europe and safeguard the protection of policyholders. 

    Under Solvency II, EU insurance companies are required to hold sufficient eligible own funds on an ongoing basis to cover their Solvency Capital Requirement. The risk-based Solvency Capital Requirement enables insurance undertakings to absorb significant losses and give confidence to policyholders and beneficiaries that payments will be made as they fall due. Furthermore, the Solvency II framework includes a ladder of supervisory intervention between the Solvency Capital Requirement and the Minimum Capital Requirement, which is the minimum level of security below which a company’s financial resources should not fall. This allows for flexibility in cases of extreme situations, including measures to extend the recovery period of affected insurers, for example, as foreseen by Article 138 of the Solvency II Directive. Moreover, recent stress tests have shown that the sector is well capitalized and able to withhold severe but plausible shocks to the system. Nevertheless, insurance companies should take measures to preserve their capital position in balance with the protection of the insured, following prudent dividend and other distribution policies, including variable remuneration.

     

    Related Link: Statement

    Keywords: Europe, EU, Insurance, COVID-19, Solvency II, Business Continuity, SCR, Stress Testing, Operational Risk, EIOPA

    Featured Experts
    Related Articles
    News

    BIS and BoE Launch Innovation Hub in London

    BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.

    June 11, 2021 WebPage Regulatory News
    News

    ESRB Recommends Reciprocation of Certain Macroprudential Measures

    ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.

    June 11, 2021 WebPage Regulatory News
    News

    EC Publishes Regulation on Key Aspects of Implementation of SA-CCR

    EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.

    June 10, 2021 WebPage Regulatory News
    News

    BCBS Consults on Prudential Treatment of Cryptoasset Exposures

    BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.

    June 10, 2021 WebPage Regulatory News
    News

    EBA Revises List of Validation Rules for Reporting

    EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.

    June 10, 2021 WebPage Regulatory News
    News

    Banking Authorities and Private Sector Collaborate on Wholesale CBDC

    BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.

    June 10, 2021 WebPage Regulatory News
    News

    ESAs Publish Amended Implementing Standards on Mapping of ECAIs

    ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).

    June 10, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Major Incident Reporting Under PSD2

    EBA published revised guidelines on major incident reporting under the Payment Service Directive (PSD2).

    June 10, 2021 WebPage Regulatory News
    News

    BCBS Updates Supporting Information for G-SIB Assessment in June 2021

    BCBS updated the year-end and annual average exchange rates in context of the global systemically important bank (G-SIB) assessment exercise.

    June 10, 2021 WebPage Regulatory News
    News

    HKMA Revises Implementation Timeline for Basel Standards

    HKMA issued a circular informing the industry about its intention to revise the target effective dates for the revised frameworks on credit risk, operational risk, output floor, leverage ratio, market risk, and credit valuation adjustment risk.

    June 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7083