NBB Launches the 2019 Stress Testing Exercise for Insurers

By Regulatory News

April 05, 2019

Regulatory Reporting: EU, Stress Testing: EU, Stress Testing

NBB launched its 2019 stress test for the insurance and reinsurance companies governed by the Belgian Law. The published documents include technical specifications, technical information, reporting templates, user manual, and framework of stress tests for the insurance sector. NBB also released the timeline of the stress testing exercise. The deadline for submission of results is June 21, 2019. NBB can, after the analysis of the stress test results, issue recommendations to be implemented by the insurance undertakings.

In 2019, a significant part of the Belgian insurance sector will be subject to a stress test, which will consist of two scenarios.

The first scenario (Belgian Adverse) assesses the impact of a repricing of the Belgian sovereign debt on the solvency positions of insurers. The Belgian Adverse scenario has three parts—100 basis points increase of the Belgian sovereign bond (OLO) spread; 200 basis points increase of the OLO spread; and reverse stress, whereby the insurer has to determine the OLO spread increase at which its solvency ratio drops below 100%.
The second scenario (Low Yield) assesses the impact of a continued decline in the risk-free rates on the solvency positions of insurers.

Related Link: Insurance Stress Test 2019

Keywords: Europe, EU, Belgium, Insurance, Stress Testing, Reporting, Stress Test Scenarios, NBB

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