1. SOLVENCY II
1.1 European Commission publishes summary report on its Solvency II 2020 review consultation
On 1 February 2021, the European Commission published a summary report on its consultation on the review of the Solvency II Directive (2009/138/EC) (the Solvency II Directive). The summary report sets out the feedback it received from 73 participants during the consultation, which ran from July to October 2020.
Stakeholders representing insurers, insurance associations, non-governmental organisations (NGOs), consumers, citizens and public authorities responded to the consultation. Insurers and insurance associations represent over half of the respondents. The summary report contains feedback received on the following topics:
- long-termism and sustainability of insurers' activities and priorities of the European framework;
- proportionality of the European framework and transparency towards the public;
- improving trust and deepening the single market in insurance services; and
- new emerging risks and opportunities.
The summary report also contained a list of topics which stakeholders provided additional input on such as group supervision issues and market access of third country companies which exclusively conduct reinsurance activities. v
The results of the consultation will be considered by the European Commission when shaping the legislative proposal to amend the Solvency II Directive, which is expected in the third quarter of 2021.
The summary report can be accessed here.
1.2 AMICE response to consultation on the supervisory statement relating to SCR breach under Solvency II
By way of background, in November 2020, EIOPA launched a consultation on the statement on supervisory practices and expectations in case of a breach of the Solvency Capital Requirement (SCR) (the Statement). EIOPA sought feedback on the Statement which aims to promote supervisory convergence in the application of the supervisory ladder, in particular by addressing the recovery plan required in case of a breach of the SCR.
EIOPA considered that the ongoing uncertainty linked with COVID-19 may potentially lead to breaches of the SCR in the future, and therefore supervisory convergence in this area is timely. However, the Statement is intended to be applicable at any time and is not COVID-19 specific.
The consultation closed on 17 February 2021.
On 17 February 2021, the Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE) issued its response to EIOPA's consultation on the Statement. In its response, AMICE noted generally that the Statement lists extensive requirements in order to promote common supervisory approaches, however all will not necessarily apply in every case and as such there should be flexibility to ensure that the supervisory measures taken in the case of a breach of the SCR are tailored to the particular company and their specific situation.
AMICE's full response can be accessed here.
1.3 EIOPA launches European wide comparative study on Non-Life Underwriting Risk in Internal Models
On 1 March 2021, EIOPA launched a European wide comparative study on non-life underwriting risk in internal models under Solvency II. The study aims to evaluate non-life underwriting risk within internal models at a European Union level and their development over a five-year time horizon.
The deadline for insurance undertakings to submit results to their national supervisory authority is 15 September 2021 and the deadline for national supervisory authorities to submit the information to EIOPA is 1 October 2021.
The study can be accessed here.
1.4 Updated Questions and Answers on Regulation
During the first quarter of 2021, EIOPA published updated Questions and Answers (Q&As) relating to the following topics under Solvency II:
- Risk Free Rate - Question ID 1881;
- Risk Concentration - Question ID 2084;
- Reporting Templates – Question ID 2227; and
- Technical Provisions – Question ID 2144.
2. EUROPEAN INSURANCE AND OCCUPATIONAL PENSIONS AUTHORITY (EIOPA)
2.1 EIOPA launches public consultation on open insurance
On 28 January 2021, EIOPA launched a public consultation on open insurance with a focus on access to and sharing of insurance-related data.
In its consultation paper, EIOPA asks whether and how far insurance value chains should be opened up by the sharing of insurance related and specific policyholder data amongst insurance and non-insurance firms, to protect policyholder rights and to allow for innovation in products and services. The areas covered in the consultation paper include:
- open insurance definition and use cases;
- risks and benefits of open insurance;
- regulatory barriers; and
- open insurance framework.
The deadline for responses to the consultation is 28 April 2021.
The consultation can be accessed here.
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