The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation. The supervisory statement covers the authorization of acquisition of run-off undertakings or portfolio, the ongoing supervision, and the prudential and conduct of business issues. In another development, EIOPA proposed amendments and corrections to the implementing technical standards on supervisory reporting and disclosure requirements under Solvency II. This proposal concerns amendments to the implementing technical standards on disclosure and reporting as well as to the guidelines on the supervision of branches of third country insurance undertakings and guidelines on reporting for Financial Stability Purposes. The feedback period for both the consultations ends on October 17, 2021.
EIOPA proposed changes to the reporting requirements that are mainly based on the report on quantitative reporting templates published along with the 2020 Solvency II Opinion. In addition to these changes, the proposals include simplification of quarterly reporting for all undertakings, elimination of certain reporting templates for all undertakings, and new thresholds to promote better risk-based and proportionate reporting requirements. The consultation addresses reporting requirements with respect to climate change risks, internal models, third-country branches, Solvency Capital, group reporting, loss-absorbing capacity of deferred taxes, and look-through approach for collective investment undertakings, EIOPA proposals on the review of the reporting requirements should bring several benefits that will ultimately lead to a better protection of policyholders, including reduction of reporting costs for the majority of insurance undertakings and inclusion of information needed for supervisory purposes (focusing on emerging risks and new areas for which supervisors identified a number of data gaps). Another expected benefit is a more fit-for-purpose reporting—for example, reducing and simplifying when possible but also accommodating gaps identified by supervisors. EIOPA will consider the responses it receives to this consultation before finalizing the implementing technical standards on reporting and disclosure and the associated guideline documents. The draft amendments and corrections will then be submitted to the European Commission for endorsement. All amendments will be incorporated in the XBRL taxonomy version 2.7.0 and are expected to be applicable for end-2022 reporting. The consultation of the 2.7.0 taxonomy release will not follow the usual calendar (PWD on June 01 and final taxonomy on July 15) but will instead be consulted on as soon as possible after the delivery of the draft implementing technical standards to allow industry more preparation time.
- Press Release on Run-Off Undertakings
- Consultation on Run-Off Undertakings (PDF)
- Press Release on Reporting and Disclosure
- Consultation on Reporting and Disclosure (PDF)
- Proposed Implementing Standards (ZIP)
- Loss Absorbing Capacity Templates (XLSX)
Comment Due Date: October 17, 2021
Keywords: Europe, EU, Insurance, Solvency II, Reporting, Climate Change Risk, Internal Models, ESG, Implementing Technical Standards, Disclosures, Run-Off Undertakings, 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.
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