Commission adopts Solvency 2 and CRR acts: The Commission has adopted several key pieces of legislation relating to Solvency 2 and the Capital Requirements Regulation (CRR). It has adopted:

  • detailed rules to implement Solvency 2, particularly on:
    • valuation of assets and liabilities;
    • how to set the level of capital and calibrate various asset classes an insurer may invest in; and
    • management and governance of insurance companies;
  • a detailed liquidity coverage requirement (LCR) for banks to hold enough high-quality liquid assets to cover the difference between the expected outflows and inflows over a 30-day stressed period; and
  • clarification of the leverage ratio for banks.

The Commission notes the Solvency 2 and LCR delegated acts are the first legislative acts to provide a differentiated approach to securitisation. They allow a more proportionate and risk-sensitive prudential treatment for banks and insurance undertakings acting as investors in securitisation positions, provided that they meet a set of eligibility criteria. (Source: Commission Adopts Solvency 2 and CRR Acts)

Commission publishes Solvency 2 FAQs: The Commission has published a set of FAQs explaining what Solvency 2 and the new Delegated Legislation cover. It compares certain aspects of the regime with both Solvency 1 (the current Directive) and the fourth Capital Requirements Directive and CRR. It gives detail of the prudential treatment of high-quality securitisations under Solvency 2. It notes that Member States must implement Solvency 2 by 31 March 2015 so it can be fully effective from 1 January 2016 but also notes the transitional periods that it says should ease the change from the Solvency 1 regime. (Source: Commission Publishes Solvency 2 FAQs)

Commission publishes supervisory reporting annexes: The Commission has published an amendment to its Implementing Technical Standards (ITS) on supervisory reporting, together with a set of annexes. The changes relate to forbearance. See FReD 8 August 2014 for further details of the original ITS. (Source: Implementing Regulation on the Supervisory Reporting of Institutions)