On 18 May, EIOPA addressed an Opinion to all European National Competent Authorities (NCAs) on the solvency position of (re)insurers in light of the withdrawal of the United Kingdom from the European Union. In its Opinion, EIOPA asks NCAs to ensure all risks to the solvency position of insurers arising from the UK becoming a third country are properly addressed.
EIOPA expects that risks for the solvency position of (re)insurers arising in consequence of the UK becoming a third country are properly identified, measured, monitored, managed and reported. It calls for NCAs to require (re)insurers it supervises to assess the effects the UK leaving Europe will have within their risk management. The Opinion sets out 14 areas where the determination of technical provisions, own funds and capital requirements of insurers will change. For example, the provision of derivatives to EU insurers by UK credit institutions; the treatment of reinsurance; and the calculation of the matching adjustment and of the volatility adjustment to the risk-free interest rate.
In conjunction with NCAs, EIOPA will monitor the risks for the solvency position of reinsurers arising from the UK becoming a third country on an ongoing basis.
The link to the Opinion is here.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.