1. SOLVENCY II
1.1 Council of the EU publishes progress report on proposed Solvency II amending Directive and IRRD
On 4 January 2022, the Council of the EU published a progress report, dated 16 December 2021, on its work on the European Commission's package of insurance reforms (Progress Report).
In the Progress Report, the Council of the EU sets out details of work undertaken on the legislative proposals for a Directive containing amendments to Directive (EU) 2009/138 (Solvency II Directive) (the Solvency II amending Directive) and a Directive on recovery and resolution of insurers (Insurance Recovery and Resolution Directive or IRRD) adopted by the European Commission in September 2021, being
- Solvency II amending Directive: The Presidency has drafted a number of compromise text proposals on three chapters of the proposed Directive: proportionality, reporting and disclosure, and quality of supervision; and
- IRRD: Numerous topics emerged where further work to reach a compromise would be needed. These include resolution goals and triggers, market coverage, the valuation of assets and liabilities, the interaction with groups, the potential interaction with national bankruptcy proceedings, resolution financing and the role of EIOPA in a minimum harmonisation context.
A copy of the Progress Report can be accessed here.
A copy of the proposed Solvency II amending Directive can be accessed here.
A copy of the proposed IRRD can be accessed here.
1.2 Updated Questions and Answers on Regulation
During the first quarter of 2022, EIOPA published updated Questions and Answers (Q&As) relating to the following topics under the Solvency II Directive:
- Solvency Capital Requirement – Question ID 2348, Question ID 1901, Question ID 2064, Question ID 1250;
- Reinsurance – Question ID 1979;
- Technical Provisions – Question ID 2102, Question ID 1770, Question ID 1683, Question ID 2056; and
- Other topics – Question ID 2350, Question ID 1489, Question ID 2381.
2. EUROPEAN INSURANCE AND OCCUPATIONAL PENSIONS AUTHORITY (EIOPA)
2.1 EIOPA launches consultation on advice to European Commission on Retail Investment Strategy
On 28 January 2022, EIOPA published a consultation paper on retail investor protection relating to the sale of insurance-based investment products (IBIPs) (Consultation Paper). The Consultation Paper is a response to the European Commission's call for advice, relating to its Retail Investment Strategy for the EU, sent to EIOPA in July 2021.
In the Consultation Paper, EIOPA consults on the following five areas:
- Addressing and enhancing investor engagement with disclosures and drawing out the benefits of digital disclosures;
- Assessing the risks and opportunities presented by new digital tools & channels;
- Tackling damaging conflicts of interest in the sales process;
- Promoting an affordable and efficient sales process; and
- Assessing the impact of complexity in the retail investment product market.
The consultation process closed on 25 February 2022 in order to facilitate the delivery of final advice to the European Commission by 30 April 2022.
A copy of the Consultation Paper can be accessed here.
2.2 EIOPA publishes revised single programming document 2022-2024
On 8 February 2022, EIOPA published its revised Single Programming Document 2022-2024 which sets out EIOPA's strategy and work programme for the coming years.
EIOPA identified the following strategic activities as areas for focus in its Annual Work Programme for 2022:
- Integrating sustainable finance considerations across all areas of work;
- Supporting the market and supervisory community through digital transformation;
- Enhancing the quality and effectiveness of supervision;
- Ensuring technically sound prudential and conduct of business policy;
- Identifying, assessing, monitoring and reporting on risks to the financial stability and conduct of business and promoting preventative policies and mitigating actions; and
- Providing effective recruitment, management, and development of EIOPA's human capital
The Single Programming Document 2022-2024 can be accessed here.
2.3 EIOPA publishes supervisory convergence plan for 2022
On 9 February 2022, EIOPA published its Supervisory Convergence Plan for 2022 which, in line with EIOPA's mandate to build a common supervisory culture and consistent supervisory practices in the EU, identifies priorities to enhance supervisory convergence.
EIOPA's priorities over the course of 2022 revolve around the following three main areas:
- Common supervisory culture and tools, including the supervisory approach to environmental, social and governance (ESG) risks;
- Risks to the internal market and level playing field, including work on the calculation of technical provisions; and
- Supervision of emerging risks, including work relating to digital transformation.
EIOPA added some new priorities for 2022 in the plan, covering areas such as exclusions from insurance cover and the lack of clarity in insurance contracts revealed by the COVID-19 pandemic, the supervision of captives and issues related to digital transformation.
A copy of EIOPA's Supervisory Convergence Plan for 2022 can be accessed here.
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