October 29, 2018

EIOPA launched a request for feedback on the methodological considerations about illiquid characteristics of insurance liabilities. The consultation addresses how the short- and long-term risks of long-term investments relate to the potential illiquid characteristics of insurance liabilities. The consultation ends on December 07, 2018. Based on the feedback received, EIOPA will further assess whether the risks connected to illiquid liabilities and the assets covering long-term liabilities are adequately reflected in the current regulatory regime.

To explore any new evidence on the features of liabilities, especially concerning their illiquidity characteristics, a dedicated EIOPA Project Group on illiquid liabilities (PG) was set up. The illiquidity characteristics of liabilities may contribute to the ability of insurers to mitigate short-term volatility by holding assets throughout the duration of the commitments, even in times of market stress. In the request for feedback, PG intends to assess the illiquidity characteristics of insurance liabilities, the actual holding periods of assets of insurers, and the risks of holding on to assets over a longer term

The work within the PG starts with an analysis on the product side. The first step involves understanding and analyzing the characteristics of the products in the market, with the intent to establish illiquidity indicators. The consultation report summarizes the analysis the PG so far. In the second step, the evidence on the actual holding period of assets by insurers will be analyzed. The aim is to get an overview on the management of different asset classes and to understand whether the holding of assets depends on the characteristics of the underlying insurance liabilities. The approach that the PG has chosen in this respect is outlined in the fourth section of the report. This section also describes the analysis to be performed by the PG on the risk of holding assets over a longer term.

The PG is also dealing with selected parts of the Call for Information from the EC. This Call was sent to EIOPA in April 2018 and requires EIOPA to submit a report by December 2019. It asks EIOPA, among others, to provide data on the liquidity of an undertaking’s insurance liabilities and information on the asset management of insurers. Stakeholder input to this request for feedback will help prepare an information request to the undertakings and EIOPA expects to send out this information request at the beginning of 2019. The information request will cover all relevant aspects necessary to answer the information request from EC, in addition to the other areas covered by the PG. It is intended to consult on any results derived on the basis of the information provided by undertakings in Autumn 2019.


Related Links

Comment Due Date: December 07, 2018

Keywords: Europe, EU, Insurance, Solvency II, Illiquid Liabilities, EC, EIOPA

Related Articles
News

PRA Finalizes Reporting Amendments to Pillar 2 Liquidity Framework

PRA published the final Policy Statement PS13/19 on regulatory reporting amendments and clarifications to the Pillar 2 liquidity framework for banks in UK.

June 17, 2019 WebPage Regulatory News
News

IAIS Consults on Revisions to IAIS Supervisory Material

IAIS has launched a public consultation on revisions to the IAIS supervisory material.

June 14, 2019 WebPage Regulatory News
News

IMF Paper on Implementing Prudential Standards in Developing Economies

IMF published a working paper that provides practical guidance on how developing economies, including non-Basel Committee member countries, could incorporate international standards into their prudential framework.

June 14, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Second Update for June 2019

EBA published answers to five questions under the Single Rulebook question and answer (Q&A) updates for this week.

June 14, 2019 WebPage Regulatory News
News

FSB Releases Update on Meeting of Regional Consultative Group for Asia

FSB published an update on the meeting of its Regional Consultative Group (RCG) for Asia.

June 14, 2019 WebPage Regulatory News
News

BoE, FCA, and MAS Announce Collaboration on Cyber Security

MAS and UK financial authorities (BoE and FCA) announced that they will work together to strengthen cyber security in their financial sectors.

June 13, 2019 WebPage Regulatory News
News

CBIRC Advisory Committee Holds Meeting, Discusses Regulatory Issues

The first meeting of the International Advisory Committee (IAC) of CBIRC was held in Shanghai from June 11 to 12, 2019.

June 13, 2019 WebPage Regulatory News
News

ECB and EIOPA Publish Common Minimum Standards for Data Revision in EU

ECB and EIOPA published the common minimum standards for supervisory and statistical reporting data by the undertakings in EU.

June 13, 2019 WebPage Regulatory News
News

IMF Reports on 2019 Article IV Consultation with Czech Republic

IMF published its staff report and selected issues report under the 2019 Article IV consultation with Czech Republic.

June 13, 2019 WebPage Regulatory News
News

APRA Response to Proposal on Revisions to Capital Framework for Banks

APRA published a paper in response to the first round of consultation on proposed changes to the capital framework for authorized deposit-taking institutions.

June 12, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3252