EIOPA launched a consultation package on supervisory reporting and public disclosure in the context of its work linked with the 2020 Solvency II review. This consultation package deals with supervisory reporting and public disclosure issues that the supervisors and industry have raised over the last three years and proposes amendments where adequate. The consultation period ends on October 18, 2019. A second wave of public consultation will occur later in the year and will complement the current consultation.
EIOPA received, on February 11, 2019, the Call for Advice of EC on the review of Solvency II Directive. EIOPA will respond to the Call for Advice in the form of a Solvency II Opinion, which will include a holistic impact assessment. This Solvency II Opinion will be published for consultation in the fourth quarter of 2019. This consultation paper is a draft response to the Call for Advice item 3.15 on reporting and disclosure. The advice in this paper will be amended with the input of this consultation process and will be included in the Solvency II Opinion to be submitted to EC. EIOPA will consult on the review of the supervisory reporting and public disclosure in two waves. The first wave covers the areas included in this public consultation. These areas are covered by specific consultation papers, with each covering a separate impact assessment. The following areas are covered in this consultation paper:
- General issues on supervisory reporting and public disclosure (EIOPA-BoS-019-300)
- Individual Quantitative Reporting Templates (EIOPA-BoS-019- 305) and Annexes (EIOPA-BoS-019-330 to 357)
- Solvency and Financial Condition Report and Narrative Supervisory Reporting (EIOPA-BoS-019-309)
- Financial Stability Reporting (EIOPA-BoS-019-306)
The EIOPA proposals involve the following key issues:
- Keep deadlines for quarterly reporting but extend the deadline for annual reporting by two weeks
- Increased proportionality by dividing templates into two categories, core and non-core with risk-based thresholds different for annual or quarterly submissions. The risk-based threshold shall reflect the nature, scale, and complexity of the risk exposure of the risk area covered by each template
- Deletion and simplification of a number of Quantitative Reporting Templates both for quarterly and annually reporting
- Harmonization of templates on cross-border information—one template enlarged, which replaces three other templates and templates on Solvency Capital Requirement templates, including now internal models reporting
- Creation of new templates to incorporate new information such as on cyber risks and product-by-product information for non-life business
- Revision of templates such as the look-through approach for collective investment funds and the variation analysis
- Improved structure of the Solvency and Financial Condition Report, with dedicated sections for policyholders and the professional public
- For pure captives' undertakings, simplifications of annual reporting and partial exemption from the SFCR
Later in the year, along with other areas of the Solvency II 2020 review, EIOPA will consult on additional areas of supervisory reporting and public disclosure and these areas involve Group Quantitative Reporting Templates, regular supervisory reporting, technical aspects of the reporting and disclosure processes, data quality aspects, and reporting and disclosure issues linked to other areas of the Solvency II 2020 review, particularly the Long-Term Guarantee templates. During the consultation, EIOPA will also organize a voluntary field testing of the new templates on cyber risk, variation analysis, product-by-product information for non-life, cross-border business, and internal model reporting. The result of both consultations will be included in the EIOPA Opinion to be submitted to EC by June 2020. After June 2020, some of the proposals will need to be considered by EC and eventually reflected in a Directive and/or Delegated Regulation amendments, such as the proposals on the public disclosure or narrative reporting. However, other proposals, such as deletion of some templates and new information to be requested could be reflected in the implementing technical standards without the need for any legislative amendment.
- Press Release
- Consultation Paper (PDF)
- General issues on Reporting and Disclosure (PDF)
- Quantitative Reporting Templates (PDF)
- Annexes to Consultation Package (ZIP)
- Solvency and Financial Condition Report (PDF)
- Financial Stability Reporting (PDF)
Comment Due Date: October 18, 2019
Keywords: Europe, EU, Insurance, Solvency II, Reporting, Disclosures, SFCR, Quantitative Reporting Templates, Financial Stability Reporting, Cyber Risk, Proportionality, EIOPA
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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