Financial Service Regulation and Compliance - Insurance April 2019
CBI publishes latest Insurance Quarterly Newsletter
The CBI published the latest edition of its Insurance Quarterly Newsletter in April 2019. Feature topics include (among other matters): the CBI 2019 Insurance Conference – 'Thriving in Challenging Times'; removal of the 'Guidance on the Risk Management of Derivatives' document from the CBI website; and changes to regulatory reporting by the Head of Actuarial Function. The newsletter also provides a series of insurance updates on a range of topics including: the recommendations for the insurance sector in light of the United Kingdom withdrawing from the EU; the EIOPA peer review on Fitness & Probity; and the Solvency II 2020 review.
CBI publishes Guidance on General Good Rules 2019
This month, the CBI issued an updated summary document setting out the main general good rules that apply to insurance distributors and (re) insurers operating in Ireland. These general good requirements include (among other matters):
- the Consumer Protection Code 2012
- the industry funding levy
- the Insurance Compensation Fund (for non-life insurers)
- the provision of a pre-contract disclosure document and a key information document in respect of life assurance products, including insurance-based investment products
Additional requirements apply in relation to motor insurance and health insurance.
EIOPA consults on corrections and amendments to the implementing standards on reporting and disclosure
On 2 April 2019, EIOPA published its consultation linked to corrections and amendments of the implementing technical standards on reporting and disclosure. The draft amendments address Commission Delegated Regulations amending Delegated Regulation (EU) 2015/35 as regards the calculation of regulatory capital requirements for securitisations as well as simple, transparent and standardised securitisations held by (re) insurance undertakings. The proposed amendments have been kept to the minimum. A detailed review of the requirements will be part of the 2020 Reporting and Disclosure Review. Stakeholders are requested to provide feedback before Tuesday 14 May 2019.
EIOPA holds Workshop on Cyber Insurance
On 1 April 2019, EIOPA hosted a Workshop on cyber insurance. Participants included brokers, policyholders, regulators and think-tanks. The workshop focussed on the main challenges facing the European cyber insurance market namely the covering and quantifying of cyber risks. These challenges have arisen in part due to limited historical data and expertise in this area. EIOPA is committed to continuing a dialogue with stakeholders to address the challenges and opportunities for the European cyber insurance market, in particular by establishing an EU framework for the insurance industry's role in cyber risk assessment, resilience and coverage.
EIOPA publishes summary of its fourth InsurTech Roundtable on 'The use of cloud computing by (re) insurance undertakings'
On 11 April 2019, EIOPA hosted the fourth InsurTech Roundtable (the Roundtable) on the use of cloud computing by (re) insurance undertakings. The purpose of the Roundtable was to discuss views and approaches to cloud outsourcing in a Solvency II and post-European Banking Authority Recommendations environment. Solvency II principles on outsourcing remain valid for cloud solutions. EIOPA's focus is to ensure clarity, convergence and cross-sectoral harmonization in applying these principles. EIOPA is committed to addressing the challenges and opportunities of cloud outsourcing for the European insurance sector and will consider the outcome of the Roundtable discussions as part of its ongoing work in this area.
EIOPA issues Statement on Proportionality Principle in the context of Solvency Capital Requirement (SCR) supervision
On 11 April 2019, EIOPA issued a Supervisory Statement on the application of the proportionality principle in the supervision of the SCR calculated in accordance with the standard formula. EIOPA has identified a number of potential divergent supervisory practices concerning the calculation of immaterial SCR sub-modules. To ensure a consistent supervisory approach and reduce the potential for arbitrage, EIOPA is calling for the consistent implementation of the proportionality principles. EIOPA is closely monitoring the application of the proportionality principles using its regular supervisory convergence tools such as peer reviews.
EIOPA publishes 2018 Insurance Stress Test Recommendations
On 26 April 2019, EIOPA published its 2018 Insurance Stress Test Recommendations. The recommendations consider the risks and vulnerabilities identified through the findings of the 2018 Insurance Stress Test and are addressed to the NCAs. The recommendations were grouped into the following categories:
- supervisory convergence and financial stability
- efficiency and enhancing the stress test exercise process
- cross-sectoral coordination
EIOPA will monitor the implementation of the recommendations by the NCAs.
EIOPA publishes its supervisory priorities for 2019
On 26 April 2019, EIOPA published its first supervisory activities report, which details its supervisory activities during 2018 and its priorities for 2019. EIOPA confirmed that its supervisory priorities for 2019 remain the same as 2018, although new areas have been identified in each priority area. EIOPA has three priorities for 2019:
- continued focus on the practical implementation of the key characteristics of the common supervisory culture and the development of supervisory tools (to include among other matters, a review on travel insurance and ensuring convergent supervisory practices on Solvency II remuneration requirements)
- consideration of the risks to the internal market and to the level playing field, which may lead to supervisory arbitrage
- the supervision of emerging risks including the supervision of run-off undertakings and the use of risk mitigation techniques. EIOPA also considers Brexit, InsureTech and the supervision of data and IT-related risks (including cyber risk) as emerging risks
For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.
Date published: 13 May 2019