Ireland: Insurance Quarterly Legal And Regulatory Update 1 April - 30 June 2018


Solvency II

(i) Central Bank publishes Guidance on the Approval and Supervision of Special Purpose Vehicles under Solvency II

On 4 April 2018, the Central Bank of Ireland (the "Central Bank") published Guidance on the Approval and Supervision of Special Purpose Vehicles ("SPVs") under Solvency II (the "Guidance").

The European Union (Insurance and Reinsurance) Regulations 2015 transposed the Solvency II Directive into Irish law. Commission Delegated Regulation 2015/35 and Commission Implementing Regulation 201/462 set out specific rules for SPVs under Solvency II related to authorisation, system of governance, supervisory reporting and solvency requirements.

The Guidance intends to assist both single and multi-arrangement SPVs comply with the requirements under the Solvency II framework. To this end, the Guidance provides detail of the expectations of the Central Bank in respect of the compliance of SPVs with the Solvency II legislation set out above.

The Guidance is available here.

(ii) European Commission publishes report on the supervision of group (re)insurance undertakings and the transitional period for IORPs

On 5 April 2018, the European Commission published a report on the application of Solvency II as regards the supervision of group insurance and reinsurance undertakings, and the transitional period for institutions for occupational retirement provision business ("IORPs"). The Commission is required under Solvency II to report to the European Parliament and the Council of the European Union on both of these topics, and this report fulfils these two (unrelated) requirements in a single document.

Regarding the group supervision regime, the report concluded that only one area required legislative amendment at this stage. The report identified divergences in the supervision and approval of group internal models between Member States and that the European Insurance and Occupational Pensions Authority ("EIOPA") requires enhanced powers to bring about convergence. However, the report noted that the introduction of a legislative proposal to amend Solvency II so as to mitigate this issue has already been introduced as part of the Commission's proposals to reform the European System of Financial Supervision. The proposal, gives EIOPA a greater role in ensuring supervisor convergence in the area of internal model applications and information sharing.

Regarding the transition period for IORPs operated by life insurers, the report concluded that the Commission may decide to extend it, however this decision would be made nearer the end of the current transition period (end 2022).

The report is available here.

(iii) Central Bank issues Dear CEO letter on Solvency II Regulatory Reporting

On 16 April 2018, the Central Bank issued a Dear CEO letter addressing regulatory reporting under Solvency II by (re)insurance undertakings. The letter sets out the concerns of the Central Bank as regards the accuracy of submissions, following their analysis of reported data by insurance firms and a thematic onsite inspection into the reporting process.

The letter noted that firms are obliged to provide complete and accurate information to the Central Bank and emphasised the importance of implementing a robust regulatory reporting framework. The letter went on to set out some of the reasons that undertakings are not Solvency II complaint, which include:

  • Some undertakings failed to meet the basic requirement of having a Supervisory Reporting policy in place;
  • Some Boards are signing off on only some of the annual QRTs;
  • There has been minimal oversight or active engagement by the Risk and Compliance function of the regulatory reporting process;
  • Key control points identified in the regulatory reporting process are not being set out in detailed process documents and evidence of control checks are not always recorded. Such documentation is important because directors must attest to the accuracy of the annual returns, and if there is a lack of evidence of the control checks working as intended the directors cannot use the assurance process as the basis for attesting to the accuracy of reporting; and
  • Error management, particularly processes for identifying repeat errors, requires improvement.

Examples of good and poor practices are set out in the Appendix to the letter.

The Dear CEO letter is available here and a press release providing context to the letter is available here.

(iv) EIOPA publishes updated Solvency II Q&A

During the period 1 April 2018 to 30 June 2018, EIOPA published updated Questions and Answers ("Q&As") on the following:

  • (European Union) No 2015-2450 templates for the submission of information to the supervisory authorities;
  • (European Union) No 2015-2011 with regard to the lists of regional governments and local authorities;
  • (European Union) No 2015-2451 with regard to internal models;
  • (European Union) No 2015-2452 with regard to the procedures, formats and templates of the solvency and financial condition report;
  • (European Union) 2016-97 on insurance distribution;
  • Answers to Questions on Commission Delegated Regulation (European Union) 2015/35 supplementing Directive 2009/138;
  • Answers to questions on Commission Delegated Regulation (European Union) 2015/35 Decisions;
  • Guidelines on contract boundaries;
  • Guidelines on application of outwards reinsurance;
  • Answers to Questions on Guidelines on application of outwards reinsurance;
  • Answers to Questions on Guidelines on contract boundaries;
  • Answers to Questions on Guidelines on group solvency;
  • Answers to Questions on Guidelines on Health Catastrophe Risk Sub-Module;
  • Answers to Questions on Guidelines on own risk and solvency assessment;
  • Answers to Questions on Guidelines on reporting and public disclosure;
  • Answers to Questions on Directive 2009-138; and
  • Answers to Questions on Risk-free Rate Technical Information such as VA Calculation; General Questions, Financial Market data, Extrapolation, Credit and currency adjustments.

The Q&A may be accessed here.

(v) Commission Implementing Regulations on mapping credit assessments of external credit assessment institutions under Solvency II published in the Official Journal of the European Union

On 25 April 2018, two Commission Implementing Regulations were published in the Official Journal of the European Union:

  • The Commission Implementing Regulation (EU) 2018/634 will amend Implementing Regulation (EU) 2016/1799 by updating the mapping tables which specify the correspondence between the credit risk assessments of external credit assessment institutions ("ECAIs") and the credit quality steps set out in Article 136(1) of the Capital Requirements Regulation. It will come into force on 15 May 2018 and is available here; and
  • The Commission Implementing Regulation (EU) 2018/633 will amend Implementing Regulation (EU) 2016/1800 which lays down implementing technical standards ("ITS") relating to the allocation of ECAIs to an objective scale of credit quality steps in accordance with Article 109(a)(1) of the Solvency II Directive and updates the Annex by allocating the credit assessments of five newly registered or certified ECAIs the scale of credit quality steps and removed the credit assessment of one of the ECAIs which was de-registered. It too will come into force on the 15 May 2018 and is available here.

(vi) The European Working Group issues updated Solvency II Tripartite Data Exchange template

On 7 May 2018, the European Working Group ("EWG") issued a new standard Solvency II Tripartite Data Exchange template (the "TPT V4.0") to facilitate the exchange of information between Insurers and Asset Managers.

The first version of the template TPT V3, was formally issued in October 2015 and has been widely adopted across Europe with a review of TPT V3 completed in April.

The accompanying press release and the new version TPT V4.0 can be accessed here.

(vii) The European Commission requests information from EIOPA on long-term insurance and reinsurance activities under Solvency II

On 17 May 2018, the European Commission published a letter it sent to EIOPA requesting information on the impact of Solvency II on long-term insurance and reinsurance activities. The Solvency II Directive sets out two review clauses for 2020 covering the standard formula for capital requirements and the long-term guarantee ("LGTs") measures.

EIOPA submitted annual reports on the LGT measures to the European Commission in 2016 and 2017. In addition to the information already provided the European Commission identified other areas it would like further information on, to help it assess the appropriateness of the Solvency II Directive by 2020. Its request for information covers the use of LTG measures by insurance and reinsurance undertakings, the characteristics and valuation of insurers' liabilities and evidence on insurers' behaviour as long-term investors.

In the letter the European Commission invites EIOPA to provide the information requested by 16 December 2019 and asks EIOPA to share its timetable for the work and will follow up with a call for advice closer to the 1 January 2021 review deadline.

A copy of the letter can be view here with the request for information viewed here.

(viii) ECB publishes opinion on a proposal for a Regulation amending the ESMA Regulation and on a proposal for a Directive amending Solvency II and MiFID II

On 17 May 2018, the European Central Bank ("ECB") published an opinion, dated 11 May 2018, on a proposed Regulation amending the ESMA Regulation and related legal acts and a proposed Directive amending Solvency II and MiFID II (the "Opinion"). The proposed legislation forms part of a package of proposals set out by the European Commission to reform the European System of Financial Supervision.

The ECB expressed its support of the proposed Regulation's aim to contribute to the development of the Capital Markets Union ("CMU"), noting the single supervision of at least specific market segments needs to be envisaged in order to ensure consistent enforcement across the European Union. Furthermore, the ECB recommended that consideration be given to the role of the ECB as supervisor of credit institutions under the Single Supervisory Mechanism Regulation.

The ECB went on to make a number of specific observations regarding the role of the ECB in central counterparty ("CCP") matters, including support of the revision of ESMA's governance structure and the inclusion of an ECB representative as a permanent non-voting member of ESMA's Board of Supervisors.

The Opinion is available here.

ESMA advises that the opinion be read in conjunction with the ECB Opinion of 2 March 2018 on the proposed Regulation amending the ESRB Regulation and the ECB Opinion of 11 April 2018 on the proposed Regulation amending the EBA Regulation, available here and here respectively.

(ix) Implementing Regulation on technical information for calculation of technical provisions and basic own funds for the second quarter of 2018 reporting under Solvency II published in Official Journal of the European Union

On 18 May 2018, the Commission Implementing Regulation that lays down technical information for the calculation of technical provisions and basic own funds for reporting for the second quarter of 2018 under the Solvency II Directive was published in the Official Journal of the European Union.

The European Commission adopted the Implementing Regulation on 4 May 2018 which entered into force on 19 May 2018 and applies from 31 March 2018.

A copy of the Commission Implementing Regulation (EU) 2018/730 can be viewed here.

(x) EIOPA publish report regarding comparative study on market and credit risk modelling under Solvency II

On 22 May 2018, EIOPA published a report detailing the findings of its first comparative study on market and credit risk modelling.

The comparative study of market and credit risk in internal models was undertaken between 2016 and 2017. The aim of the study was to develop supervisory tools and foster common supervisory practices. This report summarises the key findings from this study and sets out the supervisory initiatives being taken following the conclusions of this study.

The overall results show significant variations in asset model outputs. This may be attributable to model specificities of which national competent authorities are already aware, however it may also indicate a certain need for further supervisory scrutiny. EIOPA notes that this study is a first step in an ongoing process of monitoring and comparing internal market and credit risk models, and to this end EIOPA has decided to perform regular annual studies to further develop supervisory tools and foster consistency of supervisory approaches.

The report can be accessed here.

To view the full article 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
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions