On 17 May, the European Commission published an information mandate and accompanying letter it sent to EIOPA requesting information relating to the Solvency II Directive. The Commission notes that the Solvency II Directive sets out two review clauses for 2020 (2020 review), one on the standard formula for capital requirements and one on the long-term guarantees measures. The review clauses contain specific objectives relating to the availability of long-term guarantees in insurance products, the behaviour of insurance undertakings as long-term investors and, more generally, financial stability. The Commission notes that it is necessary for EIOPA to gather in-depth evidence in advance of the 2020 review. As part of this evidence EIOPA has submitted two annual reports on long-term guarantees measures in 2016 and 2017.
In the information mandate the Commission invited EIOPA to provide information on: (i) insurance liabilities; (ii) asset management of insurers; (iii) long-term guarantee measures; and (iv) market valuation of insurance liabilities.
In preparation for the 2020 review the Commission will assist EIOPA by assessing the sustainability of insurer's investments and undertake a study on the drivers of insurer's investments in equity, which should shed further light on the impact of the prudential requirements on insurers' asset allocation.
The Commission invites EIOPA to provide the information by 16 December 2019 and asks EIOPA to share its timetable for the work.
A link to the information mandate 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.