EIOPA has launched today a series of consultations on regulatory technical standards (RTS) and implementing technical standards (ITS) regarding changes that are expected to be introduced to the regulatory framework as part of the Solvency II review process.
The altogether five consultations launched today – four on RTS and one on ITS – cover topics ranging from cross-border supervision and the liquidity management of insurers to the criteria for identifying exceptional sector-wide shocks. These standards, once adopted, will guide the implementation of the new features within the Solvency II framework to improve supervisory effectiveness, risk management and financial stability in the EU’s insurance sector.
EIOPA invites stakeholders to provide their feedback on the Consultation Papers listed below by responding to the questions via the online surveys no later than 2 January 2025. All responses will be published on EIOPA’s website unless otherwise requested.
On liquidity risk management
The draft RTS on liquidity risk management plans sets out the criteria defining which undertakings and groups should include medium- and long-term analyses in their liquidity risk management plans as well as specification on the content of the plans and the frequency at which they should be updated.
On exceptional sector-wide shocks
The draft RTS on exceptional sector-wide shocks provides criteria to supervisory authorities for identifying such shocks. At the time of exceptional shocks, supervisors may require insurers with a particularly vulnerable risk profile to restrict or suspend dividend payments, share buybacks or bonuses.
On undertakings under dominant/significant influence or managed on a unified basis
This draft RTS specifies factors for identifying insurance undertakings that are under dominant or significant influence, as well as those managed on a unified basis. These factors are relevant for supervisory authorities to identify and effectively supervise insurance groups.
On scenarios for best-estimate valuations for life insurance obligations
This ITS relates to a simplification of the valuation for life insurance obligations that will be introduced with the Solvency II review. The simplification is foreseen to be used by specific small and non-complex undertakings. The ITS sets out the methodology for deriving technical information that insurers will need when applying the simplification.
On enhancing the supervision of cross-border activities
The Solvency II review introduces new rules to enhance cooperation and information exchange between home and host supervisors in case of significant cross-border activities. This draft RTS sets out the conditions and criteria that need to be considered by host supervisors when determining the relevance of cross-border activities for their market.
Background
Solvency II serves as the prudential framework for insurers and reinsurers across the EU. It is designed to protect policyholders and beneficiaries while safeguarding the stability of the European insurance sector through robust regulations and effective supervision.
In 2021, the European Commission initiated a comprehensive review of Solvency II to enhance the sector’s resilience to future crises, further strengthen policyholder protection, and simplify rules where appropriate. Following the adoption of the political agreement by the European Parliament, EIOPA is now providing draft technical standards based on the mandates set out in the political agreement.
Details
- Publication date
- 1 October 2024