EC Rule Corrects Regulation Supplementing Solvency II Directive
EC published the EU Delegated Regulation 2020/442, which corrects the EU Delegated Regulation 2015/35 that supplements Solvency II Directive (2009/138/EC). Regulation 2020/442 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from July 08, 2019.
The Delegated Regulation 2015/35 has been corrected as follows:
- In Article 84(4), the introductory wording is replaced by the text—"Paragraph 2 shall not apply to investments in related undertakings, other than investments in respect of which all of the following conditions are met:"
- In Annex X, the table in the section "Risk weights for flood risk" is replaced by the table in the Annex to Regulation 2020/442.
An erroneous reference to paragraph 1 of Article 84 of Regulation 2015/35 in paragraph 4 of Article 84 exempts certain collective investment undertakings or investments packaged as funds that are also undertakings related to an insurance or reinsurance undertaking from the look-through approach. However, collective investment undertakings or investments packaged as funds should by default be subject to the look-through approach. In Annex X to the EU Delegated Regulation 2015/35, the section "Risk weights for flood risk" sets out the standard parameters for the calculation of the basic Solvency Capital Requirement for flood risk. To allow the calculation of the Solvency Capital Requirement for flood risk for the region United Kingdom of Great Britain and Northern Ireland, the table should have one row for each of that region’s 124 risk zones. Therefore, Regulation 2015/35 has been corrected accordingly.
Related Links
Effective Date: April 15, 2020
Keywords: Europe, EU, Insurance, Reinsurance, Solvency II, Correction to Regulation, SCR, Risk Weights, Regulation 2015/35, Regulation 2020/442, EC
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Cassandra Hannibal
Life insurance actuary; risk management and economic capital specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Previous Article
ECB Updates List of Legal Forms in AnaCredit Reporting ManualRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.
