EIOPA consults on calculation process for the Solvency II relevant risk free interest rate 

EIOPA has published a consultation paper on the calculation process for the Solvency II relevant risk free interest rate. The Technical Document sets out the methodology, assumptions and identification of the data for the calculation of the relevant risk free interest rate term structures which are used for the calculation of technical provisions. Comments are welcomed from interested stakeholders in advance of 21 November 2014. 

Please click here to view the consultation documentation in full.   

EIOPA submits first set of Solvency II ITS 

EIOPA has delivered the first set of draft Solvency II Implementing Technical Standards (ITS) to the European Commission which must be endorsed by the Commission within three months. They will subsequently be translated into all official EU languages and will become legally binding. 

To view the draft ITS, please click here.   

EIOPA publishes 2015/16 Action Plan for Colleges and list of cross-border insurance groups for which a college is in place

EIOPA has published the Action Plan 2015/16 for Colleges of supervisors, together with a list of cross-border (re)insurance groups for which a College is in place (the “List”). The main focus of the Action Plan is the implementation of Solvency II in 2016 and the significant supervision changes under the new regime.

The List aims at increased transparency for ensuring that non-EEA supervisors are aware of the existence of a College for a particular group. The List includes the name of the group, the country of the authority of the group supervisor as well as the countries where subsidiaries and/or significant branches are situated.

To view the Action Plan click here, to view the List click here.  

Guidelines on the use of the Legal Entity Identifier

On 20 October 2014, EIOPA issued Guidelines on the use of the Legal Entity Identifier (“LEI”) in all the official EU languages. The use of LEI applies to all information collected by EIOPA, including Solvency II reporting and registers. The Guidelines state that all national competent authorities (“NCAs”) must ensure that all institutions under their supervisory remit obtain a LEI code.

EIOPA also published the Final Report on the public consultation on the draft Guidelines relating to the use of LEI, which contains the impact assessment of the Guidelines and EIOPA’s Feedback Statement on the public consultation.

NCAs should confirm within two months to EIOPA, their compliance or intention to comply with the Guidelines on the use of LEI.

Please click here to view the Guidelines and other related documentation.  

Consultation Paper on Conflicts of Interest in Direct and Intermediated Sales of Insurance-Based Investment Products 

On 1 October 2014, EIOPA published a consultation paper on Conflicts of Interest in Direct and Intermediated Sales of Insurance-based Investment Products (PRIIPS). The consultation paper follows the European Commission’s mandate to EIOPA for technical advice concerning amendments relating to conflicts of interest which MiFID II will make to the Insurance Mediation Directive. 

The consultation paper sets out what conflicts of interest are, why they matter, and outlines the current position regarding conflicts of interest across the EU. The consultation paper focuses on (i) the criteria for identifying types of conflict of interest, and (ii) the steps to be taken to identify, prevent, manage and disclose those conflicts of interest.  Finally, the consultation paper poses questions regarding the impact of possible changes to the regulation of conflicts of interest. 

Please click here to view the consultation paper.   

Risk Dashboard 2014 

EIOPA recently published its risk dashboard for the second quarter of 2014. The risk dashboard gives an overview of the overall situation in Europe, rather than by country. While the risk environment remains largely unchanged since the last EIOPA risk dashboard, notable changes include:

  • signs of improvement in credit risk conditions
  • reduction of liquidity and funding risk (due to a higher level of issue of catastrophe bonds)
  • a slight increase in life premiums but a decrease in non-life premiums

Please click here to view the risk dashboard.   

Work Programme 2015 

EIOPA has released its 2015 Work Programme. The Programme represents a series of exercises designed to establish where the greatest need for the Authority’s work lies, and where resources should be focused.  The 2015 exercise commenced with an assessment of EIOPA’s strategy, re-structured into five strategic goals: 

  • to ensure transparency, accessibility and fairness across the internal market for consumers
  • to lead the development of sound and prudent regulations supporting the EU internal market
  • to improve the quality, efficiency and consistency of the supervision of EU insurers and occupational pensions
  • to identify, assess, mitigate and manage risks and threats to the financial stability of the insurance and occupational pensions sectors
  • EIOPA to act as a modern, competent and professional organisation, with effective governance arrangements, efficient processes and a positive reputation

EIOPA have stated that each product or service launched by the Authority in 2015 will have a clear objective linked to one of these five goals. 

Please click here to view the full text of the Work Programme 2015.