Inside the Boardroom - An Insurance Perspective

The series of webinars 'Inside the Boardroom - An Insurance Perspective' offered by Ganado Advocates' Insurance and Pensions Team is in full swing with the first two sessions, tackling effective corporate governance and environmental, social and governance (ESG) issues in the context of the insurance sector, have already been held.

The upcoming sessions shall continue to tackle the regulatory expectations around some of the current key insurance board topics including cybersecurity and ICT framework, the MFSA proposed Corporate Governance Code and the EU Recovery and Resolution Directive (IRRD).

Interested individuals can apply here.

MFSA publishes Circular on updated Authorisation formats

The MFSA has announced changes to the way authorised persons are to submit an application for authorisation (old format), conversion and or/extension of their authorisation. The changes will allow authorised persons to upload confidential data directly to the MFSA.

There will be no changes for passporting notifications and requests for changes in the details of the Authorised persons will continue to be received by email and/or mail.

The MFSA further announced that a new MFSA Authorisation Webpage has been launched which is aimed at providing an overall better user experience for Prospective Applicants, Applicants and interested parties.

The MFSA's Circular can be accessed here.

EIOPA issues recommendations based on EIOPA's 2021 Insurance Stress Test

The European Insurance and Occupational Pensions Authority (''EIOPA'') has published its recommendations to supervisors and insurers based on EIOPA's 2021 Insurance Stress Test (the ''Stress Test'').
EIOPA has identified three categories of recommendations from the Stress Test which, if implemented, will result in a more resilient insurance sector in Europe. The recommendations can be grouped into three subject matters namely, recommendations on identified vulnerabilities, recommendations on availability of action to manage adverse conditions and individual undertaking-specific recommendation.

The Report can be accessed here.

EIOPA issues Opinion on individual disclosures in the context of EU-wide stress test exercises

Considering the regular Union-wide exercises that EIOPA runs, EIOPA has issued its latest Opinion on the same which is aimed at having more consistent and disciplined communication of individual stress test results.

In its Opinion, EIOPA notes how most insurers continue to show reluctance on consenting to the publication of their individual stress test results and in fact, in the last exercise carried out, only 8 out of 44 participants consented to the publication of their results.

EIOPA has proposed that a legislative amendment can ratify this situation, specifically by introducing a targeted amendment of Directive 2009/138/EC through which EIOPA will be able to, should it consider it appropriate to do so, disclose the results for each participating financial institution.

The Opinion can be accessed here.

EIOPA issues consultation on draft Guidelines on integrating the customer's sustainability preferences in the suitability assessment under the IDD

Pursuant to Commission Delegated Regulation (EU) 2021/1257, EIOPA has launched a public consultation on draft Guidelines on integrating the customer's sustainability preferences in the suitability assessment under the IDD (the ''Draft Guidelines'').

The Draft Guidelines aim to provide guidance on:

  • How to help customers better understand the concept of "sustainability preferences" and their investment choices;
  • The collection of information on sustainability preferences from customers;
  • How to match customer preferences with products, based on the Sustainable Finance Disclosure Regulation (''SFDR'') product disclosures;
  • When to assess sustainability preferences; and
  • The sustainable finance-related competences expected of insurance intermediaries and insurance undertakings who provide advice on IBIPs.

Stakeholders are invited to provide their feedback on the above by 13 May 2022. A public hearing with stakeholders will also be taking place on 6 May 2022.

Interested stakeholders may respond to the public consultation here.

EIOPA publishes its supervisory statement on Run-off undertakings

On the 7 April 2022, EIOPA published its supervisory statement on supervision of run-off undertakings (the ''Statement''),

The Statement, which focuses on full, partial and specialised run-off undertakings, outlines a number of supervisory issues and challenges in the supervision of run-off portfolios or undertakings that EIOPA has identified. These were mostly related to the difficulties of the process of authorisation of the change of ownership or portfolio transfer as well as the lack of specific regulation of run-off under the Solvency II framework.

The Statement also tackles the recent increasing interest by private equity firms in acquiring run-off (re)insurance undertakings or portfolios and includes insight on what supervisory authorities should consider and look out for before private equity firms are authorised to acquire the same.

The Statement can be accessed here.

EIOPA publishes fourth report on costs and past performance of insurance and pension products

On 5 April 2022, the EIOPA published its fourth report on insurance and pension products' costs and past performance. The research conducted by EIOPA shows that despite the difficulties that the COVID-19 pandemic brought about, both insurance and pension retail investment markets performed well.

Worthy of mention is the fact that for the first time ever, EIOPA also carried an analysis on a limited sample of products with sustainability features. An assessment of the unit-linked and hybrids ESG products showed that the appetite for ESG financial products applies to the IBIPs market too which is mainly driven by the positive valuation of the asset classes to which ESG funds are normally exposed and the widespread interest on the ESG sector, which boosted the demand for these products ultimately increasing their valuation and pricing.

The report can be accessed here.

Ganado Advocates' Insurance Regulatory Team Compliance Services

As directors of insurance undertakings and insurance intermediaries are undoubtedly aware, licensed entities are bound by a great number of regulatory obligations.

Our Insurance Regulatory Team at Ganado Advocates offers a range of compliance services including, ongoing regulatory assistance and advice on an "as needed" basis throughout the course of insurance application processes such as licence applications, change in control, passporting, portfolio transfers, compliance support services to the Compliance function of an insurance undertaking or insurance intermediary, gap analyses on specific areas such as the POG process, sanction screening, Complaints handling or other IDD requirements, amongst many others.


Integration of Sustainability Risks and Factors in the delegated acts under Solvency II and IDD

As of 2 August 2022, a number of changes will be introduced to the Commission Delegated Regulation (EU) 2015/35 and the Commission Delegated Regulations (EU) 2017/2358 and (EU) 2017/2359 which will require insurers to integrate sustainability risks and factors in the areas of organisational requirements and product oversight and governance systems. This article offers a brief insight into these upcoming changes.

Read more here →

Insurance Companies and Insurance Intermediaries - An Evaluation of Board size and Gender Diversity

A well-functioning board for an insurance company or insurance intermediary, having a strong corporate governance framework, is undoubtedly one of the keys to its success. This article tackles two key aspects underlying good corporate governance, namely size and gender diversity.

Read more here →

Originally published April 28, 2022

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.