EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios. Through this consultation, EIOPA is responding to a Call for Advice addressed to the three ESAs, to support EC in developing the definitions and methodologies to be used for the disclosure requirements stemming from the Taxonomy Regulation. The public consultation closes on January 12, 2021, with the EIOPA expecting to finalize its advice and submit to EC in February 2021.
EIOPA seeks feedback and comments on the proposed ratios as well as the potential alternative measures, the necessary disclosures around the approaches taken, methodologies used, and the expected impact of the future mandatory disclosures. In this consultation, EIOPA is considering whether the mandatory ratios of non-financial undertakings, as set out in the Taxonomy Regulation, are relevant and appropriate to depict insurance and reinsurance activities or whether they need to be translated to the most appropriate and comparable key performance indicators for insurance and reinsurance businesses. EIOPA suggests requiring two most relevant key performance indicators on sustainability that depict the extent to which an insurer or reinsurer conducts taxonomy-relevant activities in relation to non-life gross premiums written and helps in funding taxonomy-related activities in relation to total assets
The Call for Advice had requested EIOPA to develop the relevant ratios to be mandatorily disclosed by the insurance undertakings falling within the scope of the Non-Financial Reporting Directive. This consultation paper presents the related EIOPA advice regarding Article 8 of the Taxonomy Regulation, which specifies the ratios that have to be depicted by non-financial undertakings. EIOPA is considering whether the mandatory ratios of non-financial undertakings, as set out by Article 8 of the Taxonomy Regulation, are relevant and appropriate to depict insurance and reinsurance activities or whether they need to be "translated" to the most appropriate and comparable key performance indicators for insurance and reinsurance businesses. For that, the Call for Advice further specified three insurance-specific ratios as a possible starting point: proportion of total assets invested in taxonomy-compliant economic activities; proportion of total non-life insurance underwriting exposure associated with taxonomy activities; and proportion of total reinsurance underwriting exposure associated with taxonomy activities. This consultation paper is part of the broader sustainability agenda of EIOPA to integrate environmental, social, and governance risk assessment in the regulatory and supervisory framework.
Comment Due Date: January 12, 2021
Keywords: Europe, EU, Insurance, Reporting, Disclosures, NFRD, Taxonomy Regulation, Climate Change Risk, ESG, Sustainable Finance, EIOPA
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleNBB Announces Capital Surcharges for Systemic Banks in Belgium
Next ArticleIFSB Publishes FAQs for Islamic Finance Standards
The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.
The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).
The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.
The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."
The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.