European Union: Insurance Quarterly Legal And Regulatory Update - 1 July 2015 To 30 September 2015

Last Updated: 14 October 2015
Article by Valerie Bowens and Michele Barker

Most Read Contributor in Ireland, July 2017


(i) European Commission proposes amendments to the Solvency II Delegated Regulation (2015/35) concerning the calculation of regulatory capital requirements for several categories of assets

On 30 September 2015, the European Commission adopted a Delegated Regulation amending the Solvency II Delegated Regulation concerning the calculation of regulatory capital requirements for several categories of assets held by insurance and reinsurance undertakings (the "Amending Regulation").

The aim of this Amending Regulation is to remove specific regulatory impediments to financing long term investment projects by insurers by amending the treatment of infrastructure investments, of European Long Term Investment Funds ("ELTIFs") and of equities traded on multilateral trading facilities under the Solvency II regime.

The revisions made include:

  • a new concept of 'qualifying infrastructure investments': this type of investment presents better risk characteristics than other infrastructure investments and insurers will need to hold a lower level of capital against their investment in these infrastructure projects. 'Qualifying infrastructure investments' will form a distinct asset category under Solvency II and will benefit from an appropriate risk calibration;
  • allowing investments in ELTIFs to benefit from lower capital charges under Solvency II. This brings them in line with investments in European Venture Capital Funds and European Social Entrepreneurship Funds, which benefit from the same equity capital charge as equities traded on regulated markets;
  • extending the application of a transitional measure for equity investments to unlisted equities, so that insurers will not suddenly withdraw from equity investments; and
  • granting equities traded on multilateral trading facilities (MTFs) the same capital charge as equities traded on regulated markets.

The European Parliament and the Council have up to three months to exercise their right of objection, with the possibility to extend this period for another period of three months at their initiative.

The proposed Amending Regulation can be accessed via the following link:

(ii) New EIOPA Solvency II DPM and XBRL taxonomy package published

On 28 September 2015, the EIOPA Solvency II DPM and XBRL taxonomy package was distributed to the stakeholders for review, before the publication of the official 2.0.1 on 21 October 2015.

This version incorporates the latest business changes on the Solvency II requirements, in particular:

  • the Amendments in the outcome of the public consultation including all the specific amendments; and
  • The additional validations incorporated in relation to the 2.0.0 version are included for consultation but not yet formally approved by EIOPA. This procedure will happen before the publication of 2.0.1.

This release also introduces two specific changes for which EIOPA seeks feedback from stakeholders in terms of the business and IT technical implementation:

  • change of the data type from boolean to enumerated values for certain metrics; and
  • all new validations (not included in 2.0.0).

Stakeholders should send any feedback on this release to EIOPA before 12 October 2015.

The release is available at the following link:

(iii) EIOPA publishes opinion on the group solvency calculation in the context of equivalence

On 25 September 2015, EIOPA published its opinion on group solvency calculation in the context of equivalence (the "Opinion"). The Opinion is of relevance for insurance or reinsurance groups that operate outside the European Economic Area ("EEA") in third countries whose solvency regimes are considered to be equivalent to the Solvency II regime. It aims to provide consistency on the group supervisor's approach towards the third country's capital requirement to be used for the calculation of the solvency position of such groups and to ensure that the supervisory assessment of the availability of the third country undertaking's eligible own funds is carried out in a convergent manner.

Gabriel Bernardino, Chairman of EIOPA, remarked:

"Supervisory convergence is an essential element in the implementation of Solvency II and is a high priority on EIOPA's agenda. With this Opinion, EIOPA intends to achieve a level playing field for the EU insurance groups by securing consistent practices by National Competent Authorities ("NCAs").

The Opinion is available via the following link:

(iv) EIOPA publishes a speech on Solvency II

On 2 September 2015, the Chairman of EIOPA, Gabriel Bernardino gave a speech at the international conference "Solvency II: What Can Go Wrong?" in Slovenia. He outlined that Solvency II brings a new risk culture and enhanced consumer protection while using the latest international developments in risk-based supervision, actuarial science and risk management.

Mr Bernardino believes that insurers need to look at Solvency II as a tool to foster a true risk culture in the organisation and that insurance company boards need to make sure that the implementation of Solvency II is used as an opportunity to reinforce good governance in the organisation.

The speech outlines that insurers need to implement proper processes to deal with product design, development and marketing and identify and manage consumer risks. Mr Bernardino believes that this is a key feature to ensure that conduct risks are mitigated since inception.

Credible and independent supervision is a key important asset for the confidence of consumers and investors and in this regard, Mr Bernardino believes that it is in the insurance market's interest that the supervisory authorities have sufficient human and financial resources to ensure proper risk-based supervision.

The speech is available in full via the following link:

(v) Solvency II Matters Newsletters

During this quarter, the Central Bank of Ireland (the "Central Bank") published issues 20 and 21 of the Solvency II Matters Newsletter in July and September, respectively.

In the July edition, the Director of Insurance of the Central Bank, Sylvia Cronin, stated that when discussing Solvency II with board members and senior managers a number of themes keep re-emerging, including:

  • finalising capital plans;
  • refining the governance framework;
  • the forward looking assessment of own risk ("FLAOR") process;
  • internal model progress;
  • reporting - Feedback from the test environment; and
  • ensuring board members and senior management have an appropriate understanding of the Solvency II regime.

The newsletter referred to EIOPA and, in particular, its publication of its draft Implementation Technical Standards ("ITS") and guidelines for Solvency II. The EIOPA publication covers areas from all three pillars and marks the completion of the regulatory framework.

The newsletter also reminds undertakings to keep a close watch on the finalised Solvency II reporting requirements.

The Online Reporting ("ONR") test environment remains open until the end of 2015. A supported version of the test environment will re-open in Q4 2015 to allow undertakings to complete the testing of their reporting processes in advance of Q3 returns.

The July newsletter is accessible via the following link:

In the opening message of the September edition, Ms. Cronin, stated that, in preparation for the new system of supervision under Solvency II, the Insurance Directorate had been restructured. She stated that insurance undertakings should be considering the new supervisory regime and adapting. Specifically, the boards of undertakings should be moving beyond a compliance or implementation approach and should now be considering the long term or strategic implications that Solvency II will have for their business.

The new structural changes are as follows:

  • A new supervision division has been established which will be responsible for all firms supervised by the directorate. The new division will be led by Kieran Murphy. It will see the amalgamation of the current General Insurance and Life Insurance divisions into a single supervisory division. Ms Cronin outlined that the head of supervision will adopt a sector approach with dedicated supervisory teams for each of the domestic life, domestic non-life, reinsurance and cross border sectors.
  • A new advisory, analytics and actuarial division comprising these three new teams has been established and will be led by Mark Burke.

In order to supplement the on-going supervisory engagement and to assist progress reporting during the preparatory period, the Central Bank is conducting a survey on preparedness for Solvency II. The survey was issued to compliance officers on 16 September 2015 and will remain open until 30 October 2015.

The Central Bank has announced that, due to a number of regulatory changes, the following three different elements will be required from insurance companies in order to fulfil their future reporting requirements:

  • quantitative reporting templates ("QRTs") are required from all Irish undertakings subject to Solvency II. The new templates replace the regulatory reporting requirements that insurance companies are currently subject to;
  • the Central Bank requires additional information from insurance companies to facilitate the translation of the supervisory based data into macro-economic statistical concepts;
  • the Central Bank has introduced a number of national specific templates ("NSTs"). The prudential NSTs have been designed to capture information specific to the Irish market which is not captured in the EIOPA QRTs.

The newsletter also provided an update on the consultation on the Domestic Actuarial Regime and related Governance Requirements under Solvency II Consultation (CP92). The Feedback statement along with the final requirements will be published soon for information purposes. A new PCF position of Head of Actuarial Function (HoAF) will be introduced with effect from 1 January 2016 and the existing PCF positions of Chief Actuary and Signing Actuary will be removed with effect from 1 January 2016.

The September newsletter is available in full via the following link:

(vi) EIOPA issues Set 2 draft ITS and Guidelines for Solvency II

On 6 July 2015, EIOPA published set 2 of its draft ITS and Guidelines for Solvency II. This second set covers different areas from all three Solvency II pillars (quantitative basis; qualitative requirements; reporting and disclosure).

As regards the publication, Gabriel Bernardino, Chairman of EIOPA stated:

"The publication of these Standards and Guidelines is a milestone for Solvency II and for EIOPA. It culminates a long and thorough process of development and public consultation. I want to thank all the different stakeholders that provided comments and engaged with EIOPA during the consultation phase, in particular the members of EIOPA's Insurance and Reinsurance Stakeholder Group. Their comments and suggestions contributed to a better balanced regulatory package."

The second set of draft ITS for Solvency II was submitted to the European Commission for endorsement and includes the following:

  • Draft ITS on list of regional governments and local authorities;
  • Draft ITS on index for the equity dampener;
  • Draft ITS on currency shock for currencies pegged to the euro;
  • Draft ITS on standard deviations for health insurance obligation subject to health risk equalisation systems;
  • Draft ITS on procedures when assessing external credit assessments;
  • Draft ITS on supervisory transparency and accountability;
  • Draft ITS on capital add-ons;
  • Draft ITS on submission of information to the supervisory authorities;
  • Draft ITS on procedures, formats and templates of the solvency and financial condition report; and
  • Draft ITS on exchange of information on a systematic basis with colleges.

The draft ITS on the procedures, formats and templates of the solvency and financial condition report and the draft ITS on templates for submission of information to the supervisory authorities were updated on 8 September 2015.

Where EIOPA submits draft ITS to the European Commission, the European Commission is required to immediately forward it to the European Parliament and the Council. Following the receipt of draft ITS, the European Commission has 3 months to decide whether to endorse it. The European Commission may extend this period by 1 month.

EIOPA should be notified of the endorsement, part-endorsement or non-endorsement of the draft ITS during the next quarter. The draft ITS listed above can be found at the following link:

On 14 September 2015, EIOPA issued the second set of Guidelines under the Solvency II Directive (2009/138/EC) in the official languages of the EU which includes the following:

  • Guidelines on Financial Stability Reporting;
  • Guidelines on the Extension of the Recovery Period;
  • Guidelines on the exchange of information within colleges;
  • Guidelines on the implementation of the long term guarantee measures;
  • Guidelines on the methods for determining the market shares for reporting;
  • Guidelines on reporting and public disclosure;
  • Guidelines on recognition and valuation of assets and liabilities other than technical provisions;
  • Guidelines on System of Governance; and
  • Guidelines on Own Risk Solvency Assessment (ORSA).

The aim of the Guidelines is to ensure the consistent application of EU law and to establish consistent, efficient and effective supervisory practices. EIOPA is of the opinion that the Guidelines are in line with Solvency II and the European Commission Delegated Regulation on Solvency II (Regulation 2015/35).

The Guidelines are addressed to the NCAs and the NCAs are required to confirm whether they comply or intend to comply with the Guidelines within two months of the issuance date. They will apply from 1 January 2016 and are available at the following link:

(vii) Update on Solvency II third country provisional equivalence

On 5 June 2015, the European Commission adopted its first third country equivalence decisions under Solvency II, granting Switzerland, Australia, Bermuda, Brazil, Canada, Mexico and the USA full or partial equivalence. While it was expected that the European Parliament would confirm these decisions quickly, on 16 July 2015, the European Parliament, by letter to the European Commissioner for Financial Stability, extended the time for scrutiny of the provisional equivalence decision by an additional three months i.e. until 7 December 2015. The European Parliament has given no reason for the extension of the scrutiny period.

On 14 July 2015, the European Council reached the conclusion that it would not object to the following European Commission's Solvency II third-country equivalence decisions:

  • judging the solvency and prudential regime for insurance and reinsurance undertakings in force in Switzerland to be equivalent to the requirements of Articles 172(2), 227(4) and 260(3) of the Solvency II Directive (2009/138/EC); and
  • solvency regimes in force in Australia, Bermuda, Brazil, Canada, Mexico and the United States and applicable to insurance and reinsurance undertakings with head offices in those countries to be equivalent to the requirements of Article 227(4) of the Solvency II Directive (2009/138/EC);

The European Commission's decisions are delegated acts pursuant to Article 290 of the Treaty on the Functioning of the EU. The first set of equivalence decisions can now enter into force, unless the European Parliament objects.

On 12 September 2015, the European Parliament updated its procedure file on the third country equivalence of Switzerland under the Solvency II Directive (2009/138/EC). In its procedure file, the European Parliament outlined that it will not object to the European Commission's decision to grant full equivalence to the Swiss insurance regulatory regime in all three areas of Solvency II i.e. solvency calculation under Article 227, group supervision under Article 260 and reinsurance under Article 172.

The letter confirming the extension of Solvency II third country provisional equivalence can be found via the following link:

The European Council's acceptance of Solvency II third country equivalent decisions can be accessed via the following link:

The European Parliament's updated procedure on the third country equivalence of Switzerland under Solvency II can be accessed via the following link:

The press release is available at the following link:

To read this Update in full, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.