DOMESTIC

CBI publishes latest Insurance Quarterly newsletter

The CBI has published the latest edition of its Insurance Quarterly Newsletter in December 2018. Feature topics include Brexit (with a focus on the UK temporary permissions regime and communicating with consumers in relation to Brexit) and underwriting (including feedback from the CBI's recent thematic review of underwriting opinions).

The newsletter provides a series of additional updates on a range of topics including, for example: the CBI's recent consultation on changes to the domestic actuarial regime; minor amendments to a number of insurance policy notices and Solvency II information notes; outsourcing; regulatory reporting; Solvency II DPM and taxonomy; insurance statistics (including a resubmission schedule for future quantitative reporting templates; managing general agents (MGAs) and motor insurance; EIOPA's 2018 Stress Tests.

CBI publishes latest edition of the Intermediary Times

On 13 December 2018, the CBI published the latest edition of its Intermediary Times newsletter. This end of year "bumper" edition covers a range of topics including: Brexit (with a focus on service continuity and customers communications); the Industry Funding Levy; findings from recent thematic inspections (including in relation to MGAs and the sale of gadget insurance); anti-money laundering; minimum competency and continuing professional development. The newsletter also includes a feature on Section 3.11 of the Consumer Protection Code under which firms have certain obligations in relation to, for example, mergers and business transfers.

CBI publishes consolidated view of publically available data for (re)insurance undertakings

On 18 December 2018, the CBI published tables consolidating data for individual (re)insurance undertakings as published in their Solvency and Financial Condition Reports (SFCR) for 2017. The tables comprise key metrics that have been extracted from the templates attached to the SFCRs. The CBI intends to publish this data on an annual basis following publication of the SFCRs.

Health Insurance (Amendment) Bill 2018 signed into law

On 24 December 2018, the Health Insurance (Amendment) Bill 2018 was signed into law. In addition to amending the amounts payable from the risk equalisation fund under the Health Insurance Act 1994, the new legislation makes several amendments to the acts governing the Health Insurance Authority and the VHI.

EUROPEAN

EIOPA publishes results of 2018 Insurance Stress Test

On 14 December 2018, EIOPA published the results for its 2018 insurance stress test. In total, 42 (re)insurance groups representing market coverage of approximately 75% took part in the exercise which aims to evaluate the resilience of European (re)insurers to certain stress scenarios. Three scenarios were tested in 2018 covering a wide range of market and insurance-specific risks including risks linked with natural catastrophes.

Overall, the results confirm the significant sensitivity of the sector to market shocks. In particular, the capital positions of participating groups are vulnerable not only to low yield and longevity risks but also to a sudden reversal of risk premia combined with a shock to lapse rates and claims inflation. On aggregate, the sector is, however, adequately capitalised to absorb the relevant shocks.

EIOPA publishes analysis of the European insurance intermediaries market

On 13 December 2018, the EIOPA published its first report on the evaluation of the structure of insurance intermediaries markets in Europe under the Insurance Distribution Directive (IDD). The report provides an overview of the European insurance intermediaries market up to the end of 2017 based on data for the period from 2013 to 2017. A country-by-country analysis was also published in an annex to the report.

EIOPA updates representative portfolios to calculate the volatility adjustments

On 18 December 2018, EIOPA published updated representative portfolios used to calculate the volatility adjustments (VA) to the risk-free interest rate term structures under Solvency II. The updated portfolios are based on 2017 year-end annual reporting by European (re)insurance companies to their national supervisory authorities. The updated representative portfolios will be used to calculate the VA from the end of March 2019. EIOPA revises the representative portfolios on a yearly basis with the next update scheduled for the end of 2019.

EIOPA seeks input on Solvency II reporting and disclosure requirements

On 19 December 2018, EIOPA called for input on Solvency II reporting and disclosure requirements as part of its 2020 Solvency II review. Stakeholders are invited to provide input across a number of areas including, for example: supervisory reporting; internal models; reporting templates; and public disclosure. The deadline for submissions is 21 February 2019. EIOPA intends to conduct a more formal public consultation later in 2019.

EIOPA publishes opinion on non-life cross border business of long-term nature

On 21 December 2018, EIOPA published an opinion on the supervision of non-life cross-border insurance business of a long-term nature. The opinion is addressed to national supervisors to ensure the correct application of legal requirements and consistent supervisory practises in this area. It outlines EIOPA's expectations in relation to the calculation of technical provisions and governance for cross-border business.

Insurance Europe comments on amendments to Solvency II Delegated Regulation

Insurance Europe has published a position paper on the Commission's draft proposals to amend Commission Delegated Regulation 2015/35. Insurance Europe welcomes proposals to simplify and promote the proportional application of the Solvency II regime; it believes the proposals fail to adequately address key areas such as: the recalibration of long-term equity investments; review of the risk margin cost of capital; and short-term improvements to volatility adjustments.

FSI publishes paper on the use of cloud computing by insurers

On 5 December 2018, the Financial Stability Institute (FSI) published a paper exploring the use of cloud computing services by insurers from a regulatory perspective. The paper highlights the increased use of such services by insurers and the risks they can pose and examines emerging regulatory approaches in this area. This includes, for example: developing specific regulatory principles relating to the use cloud computing services; ongoing contact with service providers to increase understanding of cloud services; supervisory examinations (on and off-site) and thematic reviews.