Featured Product

    EIOPA Launches Stress Test for Insurance Sector in EU

    May 07, 2021

    EIOPA launched the 2021 stress test for the insurance sector in EU. Along with the adverse scenario from ESRB, EIOPA has published several documents, including technical specifications, reporting templates, factsheet, and questions and answers on the stress testing exercise. The deadline for submission of results to the national competent authorities is August 10, 2021. The stress test results are planned to be published in December 2021.

    The 2021 stress test, for the first time, will complement the assessment of the pre- and post-stress capital positions with the assessment of the pre- and post-stress liquidity positions of the participants over a 90 day-time horizon. The stress test will evaluate  impact on the capital and the liquidity positions of the undertakings in scope. The capital assessment relies on the Solvency II framework, while the liquidity assessment is based on the estimation of the sustainability of the liquidity position. The two components are based on a common narrative, a common scenario, a common set of shocks but are clearly separated in terms of application of the shocks, data collection, assessment and disclosure. The 2021 stress test focuses on a prolonged COVID-19 scenario in a “lower for longer” interest rate environment. The scenario, developed in cooperation with ESRB, will assess the impact of economic consequences of the COVID-19 pandemic, which affect confidence worldwide and prolong the economic contraction. The narrative is translated into a set of market and insurance specific shocks that generate a severe but plausible “double-hit” effect to the insurance industry.

    Results will be collected through ad-hoc templates containing information to be used for analysis and validation purposes. The template for the capital component will rely to the maximum extent to the regular Quantitative Reporting Template, whereas templates for the liquidity component will be specifically developed. For the assessment of the capital position, as a general principle, the templates are be kept aligned to the regular Solvency II reporting where possible. For the liquidity component the information collected should cover the pre-and post-stress position. The information for analysis and validation purposes are kept to the minimum. The target sample defined in cooperation with the national competent Authorities encompasses 44 undertakings registered in 20 European jurisdictions and operating globally. The selected sample covers 75% of the EU-wide market based on total assets in the Solvency II.

     

    Related Links

    Keywords: Europe, EU, Insurance, Reinsurance, COVID-19, Solvency II, Stress Testing, ESRB, EIOPA

    Featured Experts
    Related Articles
    News

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597