EIOPA releases System of Governance and ORSA consultation outcomes: EIOPA has published the Final Reports from its consultations on Solvency 2 Guidelines on the System of Governance and the Own Risk and Solvency Assessment (ORSA). The Guidelines on the System of Governance set out the requirements for the sound and prudent management of undertakings without unduly restricting them in choosing how to organise themselves. The Guidelines on the ORSA contain incentives to a better understanding of the undertaking's overall solvency needs and capital allocation as well as the interrelation between risk and capital management in a forward-looking perspective. EIOPA intends to issue the Guidelines in April. They will apply from 1 January 2016. (Source: EIOPA Publishes Outcome of the Public Consultation Related to the Guidelines on the System of Governance and the ORSA)

EIOPA publishes Solvency 2 Guidelines: EIOPA has published the following Solvency 2 Guidelines in the official EU languages:

  • valuation of technical provisions;
  • undertaking-specific parameters;
  • treatment of related undertakings, including participations;
  • use of internal models;
  • treatment of market and counterparty risk exposures in the standard formula;
  • methodology for equivalence assessments by national supervisory authorities under Solvency 2;
  • loss-absorbing capacity of technical provisions and deferred taxes;
  • supervisory review process;
  • ring-fenced funds;
  • the look-through approach;
  • health catastrophe risk sub-module;
  • group solvency;
  • contract boundaries;
  • classification of own funds;
  • basis risk;
  • application of the life underwriting risk module;
  • application of outwards reinsurance; and
  • ancillary own funds.

(Source: EIOPA Issues First Solvency 2 Guidelines in the Official EU Languages)

EIOPA explains budget cut outcome: EIOPA has published a statement on the effects that the 7.6% reduction in its annual budget for the year 2015 will have on its activities. The reduction amounts to €1.7 million, approximately. This has meant a significant reorganisation which means EIOPA will need to postpone and cancel some ongoing projects. Solvency 2 will remain at the top of EIOPA's priority list but will still be affected as, for example, the Solvency 2 training programme for supervisors will be reduced by 20% and EIOPA has cancelled production of the IT supervisory toolkit. Workstreams in areas including Financial Stability and Consumer Protection are also now of lower priority. (Source: EIOPA Explains Implications of Budget Cuts for the Year 2015)

EIOPA working on infrastructure investments: EIOPA has started a new workstream on infrastructure investments for insurers. In the course of its work EIOPA intends:

  • to develop a definition of infrastructure investments that offer predictable long-term cash flows and whose risks can be properly identified, managed and monitored by insurers;
  • to explore possible criteria for the new class of long-term high quality infrastructure assets covering issues such as standardisation and transparency; and 
  • to analyse the prudentially sound treatment of the identified investments within Solvency 2, focusing on their specific risk profile.

EIOPA now intends to organise a roundtable to discuss its ideas. (Source: EIOPA Starts Working on Infrastructure Investments)