In a recent press release dated 25 May, the Romanian Financial Supervisory Authority (“FSA”) announced that NN Asigurari de Viata, Grawe Romania and Asirom VIG (covering approximately 57% of the Romanian life insurance market, considering the gross technical reserves as of 31 December 2015) will take part in EIOPA’s EU-wide stress test. The main scope of the test is to assess the vulnerabilities and resilience of insurers to adverse market developments. 

The stress test is envisaged to encompass two different stages, as follows: 

  1. Bottom-up, within which the insurance undertakings must assess and report to the national supervisory authorities the impact of the following scenarios:
    1. Low for long – where the current low interest rate levels remain constant over a long period of time;
    2. Double hit – where a rapid increase in yields on sovereign bonds occurs simultaneously with a fall in swap rates.
  2. Top-down, within which EIOPA will carry out the assessment of the data, without additional effort from the undertakings. To finalise this second stage, EIOPA will consider the data reported by the undertakings in the “bottom-up” stage. 

The selected insurance undertakings must report the results of the stress test to the FSA by 15 July 2016, whilst the consolidated data at EU level is envisaged to be released to the public by EIOPA in December 2016.