EIOPA Paper on Systemic Risk and Macro-Prudential Policy for Insurers
EIOPA published a discussion paper on systemic risk and macro-prudential policy in insurance and comments are requested by April 30, 2019. This is the fourth paper that is part of a series focused on identifying additional macro-prudential tools or measures. The paper focuses on the four tools and measures that have been specifically highlighted in the recent EC Call for Advice to EIOPA.
The paper puts together and summarizes the main findings of the work done by EIOPA, by linking sources of systemic risk and operational objectives, tools already available in the Solvency II framework, and other potential tools and measures to be further considered. The discussion paper primarily focuses on the “principles” and rationale for each tool, though the paper does not comprehensively address the operational aspects/challenges of each tool. In addition to the existing Solvency II tools with direct impact, the other potential tools and measures for further consideration include leverage ratio, capital surcharge for systemic risk, enhancement of the own risk and solvency assessment (ORSA), request of recovery plans, request of resolution plans, enhancement of the prudent person principle, liquidity risk ratios, additional reporting on liquidity, concentration thresholds, and enhanced monitoring against market-wide under-reserving. Similar to the approach followed with other legislative initiatives, the technical details could be addressed by means of technical standards, guidelines, or recommendations, once the relevant legal instrument has been enacted.
This work should now be turned into a specific policy proposal for additional macro-prudential tools or measures, where relevant and possible, as part of the Solvency II review. In the context of this series, EIOPA has followed a step-by-step approach, seeking to address the following questions:
- In the first paper in the series, which was published in 2017, EIOPA identified and analyzed the sources of systemic risk in insurance and proposed a specific macro-prudential framework for the sector.
- In the second paper, EIOPA identified, classified, and provided a preliminary assessment of the existing tools or measures in Solvency II framework to mitigate the previously identified systemic risk sources.
- The third paper assessed other potential tools or measures to be included in a macro-prudential framework for insurers. EIOPA focused on four categories of tools—namely, capital and reserving-based tools, liquidity-based tools, exposure-based tools, and preemptive planning.
Related Links
- Press Release
- Discussion Paper: Systemic Risk and Macro-prudential Policy (PDF)
- Third Paper: Enhancing Macro-Prudential Framework (PDF)
- Second Paper: Solvency II Tools with Macro-Prudential Impact (PDF)
- First Paper: Systemic Risk and Macro-Prudential Policy (PDF)
- EC Call for Advice (PDF)
Comment Due Date: April 30, 2019
Keywords: Europe, EU, Insurance, Systemic Risk, Solvency II, Macro-Prudential Policy, EIOPA
Previous Article
ECB Opinion on Loans Secured by Mortgages on Residential PropertyRelated Articles
|
News
US Agencies Consult on Capital Treatment of Land Development LoansUS Agencies (FDIC, FED, and OCC) issued a proposed rule on the treatment of loans that finance the development of land for purposes of the one- to four-family residential properties exclusion in the definition of high volatility commercial real estate (HVCRE) exposure in the regulatory capital rule.
July 12, 2019
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: Second Update for July 2019Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published answers to five questions related to supervisory reporting.
July 12, 2019
WebPage
Regulatory News
|
|
News
ESMA Updates Manual for European Single Electronic Format in EUESMA updated the reporting manual for European Single Electronic Format (ESEF).
July 12, 2019
WebPage
Regulatory News
|
|
News
FED Updates Supplemental Instructions for Reporting Form FR Y-9CFED updated the supplemental instructions for FR Y-9C reporting.
July 12, 2019
WebPage
Regulatory News
|
|
News
EBA Publishes Report on Monitoring Implementation of LCR in EUEBA published its first report on the monitoring of the implementation of liquidity coverage ratio (LCR) in EU.
July 12, 2019
WebPage
Regulatory News
|
|
News
APRA Applies Additional Capital Requirements to Three Australian BanksAPRA is applying additional capital requirements to three major banks in Australia to reflect higher operational risk identified in their risk governance self-assessments.
July 11, 2019
WebPage
Regulatory News
|
|
News
IMF Report on 2019 Article IV Consultation on Euro Area PoliciesIMF published its staff report in context of the 2019 Article IV consultation on euro area policies with member countries.
July 11, 2019
WebPage
Regulatory News
|
|
News
FSB to Survey Practices on Cyber Incident Response and RecoveryFSB launched a survey on the industry practices on cyber incident response and recovery.
July 11, 2019
WebPage
Regulatory News
|
|
News
ECB Appoints New Members of Supervisory BoardThe Governing Council of ECB appointed Edouard Fernandez-Bollo, Kerstin af Jochnick, and Elizabeth McCaul as representatives to the Supervisory Board of ECB Banking Supervision, for a five-year non-renewable term.
July 11, 2019
WebPage
Regulatory News
|
|
News
OSFI Consults on Applying Proportionality to Pillar 1 Rules in CanadaOSFI published a discussion paper seeks input on possible tailoring of the capital and liquidity requirements for small and medium-size deposit-taking institutions.
July 11, 2019
WebPage
Regulatory News
|
