Featured Product

    EIOPA Launches Stress Test for Insurance Sector in EU

    May 07, 2021

    EIOPA launched the 2021 stress test for the insurance sector in EU. Along with the adverse scenario from ESRB, EIOPA has published several documents, including technical specifications, reporting templates, factsheet, and questions and answers on the stress testing exercise. The deadline for submission of results to the national competent authorities is August 10, 2021. The stress test results are planned to be published in December 2021.

    The 2021 stress test, for the first time, will complement the assessment of the pre- and post-stress capital positions with the assessment of the pre- and post-stress liquidity positions of the participants over a 90 day-time horizon. The stress test will evaluate  impact on the capital and the liquidity positions of the undertakings in scope. The capital assessment relies on the Solvency II framework, while the liquidity assessment is based on the estimation of the sustainability of the liquidity position. The two components are based on a common narrative, a common scenario, a common set of shocks but are clearly separated in terms of application of the shocks, data collection, assessment and disclosure. The 2021 stress test focuses on a prolonged COVID-19 scenario in a “lower for longer” interest rate environment. The scenario, developed in cooperation with ESRB, will assess the impact of economic consequences of the COVID-19 pandemic, which affect confidence worldwide and prolong the economic contraction. The narrative is translated into a set of market and insurance specific shocks that generate a severe but plausible “double-hit” effect to the insurance industry.

    Results will be collected through ad-hoc templates containing information to be used for analysis and validation purposes. The template for the capital component will rely to the maximum extent to the regular Quantitative Reporting Template, whereas templates for the liquidity component will be specifically developed. For the assessment of the capital position, as a general principle, the templates are be kept aligned to the regular Solvency II reporting where possible. For the liquidity component the information collected should cover the pre-and post-stress position. The information for analysis and validation purposes are kept to the minimum. The target sample defined in cooperation with the national competent Authorities encompasses 44 undertakings registered in 20 European jurisdictions and operating globally. The selected sample covers 75% of the EU-wide market based on total assets in the Solvency II.


    Related Links

    Keywords: Europe, EU, Insurance, Reinsurance, COVID-19, Solvency II, Stress Testing, ESRB, EIOPA

    Featured Experts
    Related Articles

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267