Featured Product

    EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector

    February 19, 2021

    EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities. As part of this, EIOPA expects national competent authorities to focus their supervisory activities on monitoring the impact of the prolonged low-yield environment as well as of the COVID-19 crisis on the business model sustainability and development of insurers. EIOPA also expects the national competent authorities to monitor the impact of emerging trends and risks on insurer business models as well as on the future solvency capital and liquidity needs, combined with capital-generation capabilities in medium to long term.

    In this context, additional EIOPA expectations for the competent authorities include a consideration of the:

    • Potential spillover of risks coming from the interconnectedness of insurers with banks as well as potential spillovers form the sectors of the real economy.
    • Enhanced market monitoring of low interest rate via stress tests. The insurance stress tests for 2021 will include liquidity risk component and consider the adverse unwinding of the COVID-19 crisis such as a slower than planned recovery of the economy or double-dip evolutions (the narrative and shocks have been developed in cooperation with ESRB). 
    • Forward-looking risk assessment insurers perform in their Own Risk Solvency Assessment, or ORSA, process as well as the measures insurers take to preserve their capital position in balance with the protection of the policyholders.
    • Direction of the future transformation amid the ongoing turmoil that is likely to accelerate emerging trends in industry, especially in the area of digitalization, sustainability, new insurance products and services, or product transformations (for example, simplification of products, simplification of the product portfolio, structural changes in the products portfolio). For consideration, EIOPA also highlighted that digitalization is raising significant risks and opportunities from a supervisory perspective.

    Under the revised EIOPA Regulation, EIOPA is required to identify, at least every three years, by March 31, up to two priorities of Union-wide relevance, which shall reflect future developments and trends. National competent authorities shall take those priorities into account when drawing up their work programs and shall notify EIOPA accordingly. EIOPA shall discuss possible follow-up, which may include guidelines, recommendations to national competent authorities, and peer reviews in the respective area. The priorities of Union-wide relevance identified by EIOPA shall not prevent national competent authorities from applying their best practices and acting on their additional priorities and developments.

     

    Related Links

    Keywords: Europe, EU, Insurance, Supervisory Priorities, Solvency II, Stress Testing, COVID-19, Liquidity Risk, ORSA EIOPA

    Featured Experts
    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655