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
APRA Releases Minor Changes to Reporting Standards on SA-CCR for BanksAPRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA on Industry Self-Assessments into Governance and AccountabilityAPRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA Proposes to Amend Guidance on Residential Mortgage LendingAPRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.
May 21, 2019
WebPage
Regulatory News
|
|
News
IASB Proposes Improvements to IFRS 9 and IFRS 16IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.
May 21, 2019
WebPage
Regulatory News
|
|
News
ESAs Amend Technical Standards on Mapping of ECAIs Under CRRESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).
May 20, 2019
WebPage
Regulatory News
|
|
News
OCC Consults on Information Collection for Home Mortgage DisclosuresOCC is soliciting comment on the revision of the information collection titled “Regulation C—Home Mortgage Disclosure.” OCC also notes that it has sent the collection to OMB for review.
May 20, 2019
WebPage
Regulatory News
|
|
News
ESMA Updates the List of Guidelines Under Its Mandate in May 2019ESMA updated the overview of guidelines published under its mandate, with information and links to the related documents.
May 20, 2019
WebPage
Regulatory News
|
|
News
OCC Report Examines Key Risks for Federal Banking SystemOCC published the Semiannual Risk Perspective for Spring 2019.
May 20, 2019
WebPage
Regulatory News
|
|
News
EIOPA Updates Q&A on Regulations in May 2019EIOPA published additional questions and answers (Q&A) on guidelines, directives, and regulations applicable to insurers in Europe.
May 17, 2019
WebPage
Regulatory News
|
|
News
FSB Publishes Update on Meeting of RCG for AmericasFSB published a summary of the meeting of its Regional Consultative Group (RCG) in Americas.
May 17, 2019
WebPage
Regulatory News
|
