EIOPA Issues Paper on Solvency II Tools with Macro-Prudential Impact
EIOPA published a paper on Solvency II tools with macro-prudential impact. This is the second paper in a series on systemic risk and macro-prudential policy in the insurance sector. The paper identifies, classifies, and provides a preliminary assessment of the tools or measures in the Solvency II framework. It assesses tools or measures that could mitigate the systemic risk sources that were identified in the first paper in the series, which was published in February 2018.
The paper provides an overview of the key elements of Solvency II that may contribute to mitigating systemic risk. The paper identifies the most relevant instruments/measures in Solvency II and then describes the way each tool works, maps the tool against a source of systemic risk, and assesses the impact of the tool, to the extent possible. The paper is focused on the tools with direct macro-prudential impact: the symmetric adjustment in the equity risk module, the volatility adjustment, the matching adjustment, the extension of the recovery period, the transitional measure on technical provisions, and prohibiting or restricting certain types of financial activities. Finally, the paper provides an overview of other measures in case of breach of the Solvency Capital Requirement (SCR), along with a summary of other measures available at the national level. The paper also includes an annex on the macro-prudential impact of the most relevant long-term guarantees measures under stress (that is, volatility adjustment and matching adjustment).
The first paper in this series, which was published in 2017, identified and analyzed the sources of systemic risk in insurance. Through this paper series, EIOPA intends to ensure that any further extension of the debate on systemic risk and macro-prudential policy to the insurance sector fully reflects the specific nature of the industry.
Related Links
- Press Release
- Second Paper: Solvency II Tools with Macro-Prudential Impact (PDF)
- First Paper: Systemic Risk and Macro-Prudential Policy (PDF)
Keywords: Europe, EU, Insurance, Systemic Risk, Macro-prudential Policy, Solvency II, EIOPA
Previous Article
ESMA Chair Steven Maijoor Speaks About Brexit and Review of ESAsRelated Articles
|
News
HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.
April 16, 2019
WebPage
Regulatory News
|
|
News
EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.
April 16, 2019
WebPage
Regulatory News
|
|
News
FDIC Consults on Approach to Resolution Planning for IDIsFDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.
April 16, 2019
WebPage
Regulatory News
|
|
News
EP Resolution on Proposal for Sovereign Bond Backed SecuritiesThe European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).
April 16, 2019
WebPage
Regulatory News
|
|
News
PRA Seeks Input and Issues Specifications for Insurance Stress TestsPRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.
April 15, 2019
WebPage
Regulatory News
|
|
News
PRA Finalizes Policy on Approach to Managing Climate Change RisksPRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).
April 15, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: First Update for April 2019EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.
April 12, 2019
WebPage
Regulatory News
|
|
News
EIOPA Statement on Application of Proportionality in SCR SupervisionEIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.
April 11, 2019
WebPage
Regulatory News
|
|
News
FED Updates Form and Supplemental Instructions for FR Y-9C ReportingFED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.
April 11, 2019
WebPage
Regulatory News
|
|
News
OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR DisclosuresOSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline.
April 11, 2019
WebPage
Regulatory News
|
