Featured Product

    EIOPA Consults on Illiquid Characteristics of Insurance Liabilities

    October 29, 2018

    EIOPA launched a request for feedback on the methodological considerations about illiquid characteristics of insurance liabilities. The consultation addresses how the short- and long-term risks of long-term investments relate to the potential illiquid characteristics of insurance liabilities. The consultation ends on December 07, 2018. Based on the feedback received, EIOPA will further assess whether the risks connected to illiquid liabilities and the assets covering long-term liabilities are adequately reflected in the current regulatory regime.

    To explore any new evidence on the features of liabilities, especially concerning their illiquidity characteristics, a dedicated EIOPA Project Group on illiquid liabilities (PG) was set up. The illiquidity characteristics of liabilities may contribute to the ability of insurers to mitigate short-term volatility by holding assets throughout the duration of the commitments, even in times of market stress. In the request for feedback, PG intends to assess the illiquidity characteristics of insurance liabilities, the actual holding periods of assets of insurers, and the risks of holding on to assets over a longer term

    The work within the PG starts with an analysis on the product side. The first step involves understanding and analyzing the characteristics of the products in the market, with the intent to establish illiquidity indicators. The consultation report summarizes the analysis the PG so far. In the second step, the evidence on the actual holding period of assets by insurers will be analyzed. The aim is to get an overview on the management of different asset classes and to understand whether the holding of assets depends on the characteristics of the underlying insurance liabilities. The approach that the PG has chosen in this respect is outlined in the fourth section of the report. This section also describes the analysis to be performed by the PG on the risk of holding assets over a longer term.

    The PG is also dealing with selected parts of the Call for Information from the EC. This Call was sent to EIOPA in April 2018 and requires EIOPA to submit a report by December 2019. It asks EIOPA, among others, to provide data on the liquidity of an undertaking’s insurance liabilities and information on the asset management of insurers. Stakeholder input to this request for feedback will help prepare an information request to the undertakings and EIOPA expects to send out this information request at the beginning of 2019. The information request will cover all relevant aspects necessary to answer the information request from EC, in addition to the other areas covered by the PG. It is intended to consult on any results derived on the basis of the information provided by undertakings in Autumn 2019.


    Related Links

    Comment Due Date: December 07, 2018

    Keywords: Europe, EU, Insurance, Solvency II, Illiquid Liabilities, EC, EIOPA

    Featured Experts
    Related Articles
    News

    MAS Amends Notice 610 on Reporting Templates for Banks in Singapore

    MAS published amendments to Notices 610 and 1003 related to submission of statistics and returns, along with the reporting templates and frequently asked questions (FAQs) associated with these Notices.

    January 24, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module on Supervisory Review Process

    HKMA is issuing, by notice in the Gazette, revised versions of two Supervisory Policy Manual modules as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CA-G-5 on “Supervisory Review Process” and SB-2 on “Leveraged Foreign Exchange Trading.”

    January 24, 2020 WebPage Regulatory News
    News

    PRA Amends Pillar 2 Capital Framework for Banks

    PRA published the policy statement PS2/20 that contains the final amendments to the Pillar 2 framework and provides feedback to responses to the consultation paper CP5/19 on updates related to Pillar 2 capital framework.

    January 23, 2020 WebPage Regulatory News
    News

    FED Proposes to Revise Information Collection Under Market Risk Rule

    FED proposed to revise and extend, for three years, FR 4201, which is the information collection under the market risk capital rule.

    January 22, 2020 WebPage Regulatory News
    News

    HKMA Consults on Stay Rules on Financial Contracts Under FIRO

    HKMA published proposals for making rules related to contractual stays on termination rights in financial contracts for authorized institutions under FIRO or the Financial Institutions (Resolution) Ordinance (Cap. 628).

    January 22, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on Minimum Liquid Asset Requirements for Banks

    MAS published amendments to Notices 1015, 613, and 649 related to the minimum liquid assets (MLA) requirements.

    January 21, 2020 WebPage Regulatory News
    News

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News
    News

    OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022

    OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022.

    January 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News
    News

    OSFI Consults on Instruction Guide for Termination of Pension Plan

    OSFI is consulting on draft revisions to the instruction guide for termination of a defined benefit pension plan.

    January 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4526