EIOPA Requests Data on LTG Measures from Insurers Under Solvency II
EIOPA has requested the European Economic Area insurance undertakings, which are subject to Solvency II, to provide information on the long-term guarantee (LTG) measures. EIOPA requires this information for the preparation of the fourth LTG report, the opinion on LTG measures, and the review of Solvency II. The fourth LTG report of EIOPA is due in 2019 while the Solvency II review is due in 2020. EIOPA also updated the reporting template and technical specifications for the provision of this information.
Insurers are being requested to provide information on LTG measures, dynamic volatility adjustment, and long-term illiquid liabilities. The information to be provided on LTG measures includes impact of the extrapolation of risk-free interest rates on the financial position of undertakings, losses due to bond defaults and downgrades of bonds in matching adjustment portfolios, assets in matching adjustment portfolios, diversification effects in the calculation of the Solvency Capital Requirement when the matching adjustment is used, and overcompensation of the volatility adjustment.
National supervisory authorities will contact a representative sample of undertakings regarding the provision of information for each information request. Insurance undertakings should submit the completed reporting templates to the respective national supervisory authority. The templates should be filled according to the instructions in the technical specifications and taking into account the technical information. Insurance and reinsurance undertakings are requested to submit results to national supervisory authorities by May 17, 2019, whereas the deadline for insurance groups (for the dynamic volatility adjustment) is June 14, 2019. Deadline for national supervisory authorities to report to EIOPA (except group data) is May 29, 2019 while the deadline to report to EIOPA on groups is June 28, 2019.
The Solvency II Directive requires a review of the LTG measures and the measures on equity risk by January 01, 2021. The review will consist of the following phases:
- EIOPA will provide annual reports on the impact of the application of the LTG measures and the measures on equity risk to the European Parliament, the Council of the EU, and the EC.
- EIOPA will submit an Opinion on the assessment of the application of the LTG measures and the measures on equity risk to EC in 2020.
- Based on EIOPA's Opinion, EC will submit a report on the impact of the LTG measures and the measures on equity risk to the European Parliament and to the Council of the EU.
Related Links
Keywords: Europe, EU, Insurance, Solvency II, LTG Measures, SCR, Volatility Adjustment, EIOPA
Featured Experts
Paul McCarney
Insurance product strategist; insurance domain expert; extensive experience developing risk assessment frameworks for insurers
Brian Robinson
Actuary; risk management specialist; corporate and capital modelling expert
Previous Article
CBIRC Holds Conference on Supervision of Banks and InsurersRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.