DNB published the November 2019 issue of insurance newsletter. This issue contains an updated calendar for insurers and announces the publication of good practices on the treatment of climate-related risks under the Own Risk and Solvency Assessment (ORSA). DNB has also answered a question on whether it expects Dutch insurers to take climate-related risks into account.
The European Solvency II supervisory framework requires, in Article 262 of the Solvency II Delegated Regulation, that the ORSA of an insurer should be forward-looking and include the following: "the risks to which the company is exposed or could be exposed taking into account potential future changes in its risk profile that result from the company or from the economic and financial environment, including operational risks.' The framework also provides in guideline 5 that "the company must substantiate and document every ORSA, and the results thereof, with supporting documents." Given the potential impact of climate-related risks on both the asset side of the balance sheet and the technical provisions, DNB expects insurers to include climate-related risks in their ORSA by analyzing and describing the impact of these risks on their risk profile. DNB expects a presentation and explanation of the results of this analysis in the ORSA report. If the analysis shows that climate-related risks are not considered material—for example because the insurer is not or could not be exposed to these risks—DNB expects to see this reflected in the explanation.
The document on good practices discusses the relevant legislation and regulations. It explains which important climate-related risks can affect insurers, both in terms of physical and transition risks. Subsequently, in the form of good practices, starting points are given for the processing of (both cross-sectoral and branch-specific) climate-related risks in ORSA.
Related Links (in Dutch)
Keywords: Europe, Netherlands, Insurance, Newsletter, QIS Calendar, Solvency II, ORSA, Q&A, Climate Related Risks, DNB
Previous ArticleDNB Consults on Integration of Climate Risk Considerations for Banks
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.