On the 29 January 2010, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) published its final advice to the European Commission on the third set of consultation papers on Level 2 implementing measures for Solvency II.
Stakeholders were asked to comment on the draft proposals in November and December last year, following two earlier consultations on Level 2 measures. CEIOPS adopted the final advice on the third set of proposals at their Members’ Meeting held on 26 and 27 January.
The covering letter to the Commission considers certain issues which have arisen during the consultation on the third set of advice. In particular, stakeholders have criticised CEIOPS' overall assessment of the impact of the proposed advice. CEIOPS states that its final advice revises certain calibrations of the SCR standard formula which had increased beyond that tested in QIS4. An overall assessment of the impact of Level 2 measures on undertakings’ balance sheets will take place during QIS5.
CEIOPS comments that the changes made to the calibration of the market risk module will, on average, result in a significant decrease in the market risk charge compared to that proposed in the initial consultation. The revised charges, however, remain higher than in Q1S4.
CEIOPS have agreed with stakeholders’ comments that further data needs to be collected on non-life underwriting risk. CEIOPS have asked the Commission to finalise its advice on non-life risk as well as the health and MCR calibration for the QIS5 technical specifications.
CEIOPS will continue to provide assistance to the Commission in preparing QIS5. In particular, the issue of the illiquidity premium will be taken into account in finalising QIS5 specifications.
For further information: CEIOPS publish third set of final advice on Level 2 measures