EIOPA consults on PRIIPs product intervention: EIOPA is consulting on product intervention powers under the Regulation on Key Information Documents for Packaged Retail and Insurance-Based Investment Products (PRIIPs). The Commission has asked EIOPA to provide technical advice on the criteria and factors to be taken into account by national regulators and EIOPA in working out whether there is a significant investor protection concern or financial stability threat. EIOPA suggests a decision should take into account a number of factors. For each factor it lists examples of what authorities should consider, under the headings of the:

  • complexity of the product or financial activity of the undertaking;
  • size of the potential problem or detriment;
  • types of investor involved in a practice or to whom the product is marketed or sold;
  • degree of transparency of the product or activity;
  • particular features or underlying components of the product or transaction;
  • degree of disparity between the expected return or benefit and the risk of loss;
  • ease and cost to investors of switching or selling;
  • pricing and associated costs;
  • selling practices;
  • financial situation of the product issuer;
  • potential threats to the markets and stability in terms of factors such as the underlyings and characteristics of the product and selling behaviours; and
  • risk of disruption to financial institutions.

EIOPA asks for comment by 27 February 2015. (Source: EIOPA Consults on PRIIPs Product Intervention)

EIOPA publishes stress test results: EIOPA has published the results of its EU-wide insurance stress test. It found the sector is on the whole sufficiently capitalised in terms of Solvency 2. It thinks the sector would be more vulnerable to a double hit stress scenario that combines decreases in asset values with a lower risk-free rate, and that nearly a quarter of insurers would not meet their solvency capital requirement in a prolonged low yield scenario. (Source: EIOPA Publishes Stress Test Results)

EIOPA publishes crisis management opinion: EIOPA has published an opinion on sound principles for crisis prevention, management and resolution preparedness of national regulators. It recommends 14 principles covering matters such as:

  • crisis management groups;
  • emergency plans;
  • recovery and resolution plan requirements;
  • early warning systems;
  • structured risk-based approach to supervision;
  • trigger points; and
  • resolution powers and funding.

(Source: EIOPA Publishes Crisis Management Opinion)

EIOPA consults on Solvency 2: EIOPA is consulting on a set of standards and guidelines under Solvency 2. Its set of consultations cover each of the three Pillars of Solvency 2 and address:

  • regulatory technical standards (RTS) on recovery plan and finance scheme;
  • implementing technical standards (ITS) on regional governments and local authorities treated as exposures;
  • ITS on adjustment for pegged currencies;
  • ITS on health risk equalisation systems standard deviations;
  • ITS on the application of the equity transitional;
  • ITS on supervisory transparency and accountability;
  • ITS on capital add-on;
  • ITS on risk management: procedures when assessing external credit assessments;
  • ITS on regular supervisory reporting;
  • ITS on public disclosure: procedures, formats and templates;
  • guidelines on valuation assets and liabilities;
  • guidelines on long-term guarantees and transitional measures;
  • guidelines on extension of the recovery period;
  • guidelines on methods to determine the market share for the purpose of exemptions to supervisory reporting;
  • guidelines on financial stability reporting;
  • guidelines on reporting and disclosure;
  • guidelines on exchange of information on a systematic basis within colleges; and
  • guidelines on third country branches.

EIOPA has also published detailed feedback on its previous consultations and a note explaining the context of the current consultations. As a result it has published final reports in several areas, including:

  • Pillar 1, including on Own Funds, the Standard Formula SCR and Technical Provisions;
  • Group Solvency;
  • Internal models;
  • Supervisory Review Process (SRP); and
  • Equivalence.

It asks for comments on the new documents by 2 March 2015. (Source: EIOPA Consults on Solvency 2)