On 7 December 2018, EIOPA published the text of a letter sent by its Chair, Gabriel Bernardino, to the European Commission Director-General, DG FISMA, Olivier Guersent, relating to the Commission's November 2018 consultation on a Commission Delegated Regulation amending the Solvency II Delegated Regulation.

Among other things, Mr Bernardino says that in preparation for the Solvency II 2020 review, EIOPA is conducting investigations on the treatment of illiquid liabilities and related investments. He advises the Commission to wait and take into account the outcome of EIOPA's analysis before it reduces the capital charge for a portfolio of long-term equity investments backing long-term liabilities.

Mr Bernardino also notes the Commission's proposal to modify the general provisions on the relevant risk-free interest rate term structure. He says that the current drafting raises practical issues, as the proposed definition of a "substantial change" is too wide for a well-functioning process, and puts at risk the market consistent valuation of technical provisions.