Financial Service Regulation and Compliance - Insurance March 2019
DOMESTIC
Cost of Insurance Working Group (CIWG) publishes latest progress update
On 4 March 2019, the CIWG published its Eighth progress update on the Action Plan of the Report on the Cost of Motor Insurance. This update concentrates on the status of all the recommendations from that Report. It also reports on progress in implementing the recommendations in the Report on the Cost of Employer and Public Liability Insurance and the Personal Injuries Commission. The update highlights significant progress on the legislative front with the enactment of the Personal Injuries Assessment Board (Amendment) Act 2019 and the commencement of the Central Bank (National Claims Information Database) Act.
Director of Insurance Supervision at the Central Bank of Ireland (CBI) delivers speech on diversity in the insurance industry
Sylvia Cronin, Director of Insurance Supervision at the CBI, delivered a speech on diversity in the insurance industry to the Association of International Life Offices. Topics addressed included (among other matters):
- female diversity and career advancement
- diversity and inclusion programmes in the CBI
- the CB's initiatives for diversity in Financial Services
EUROPEAN
EIOPA requests information for its fourth long-term guarantees report (LGT) and Solvency II review
On 18 March 2019, EIOPA requested information from Solvency II (re)insurers in order to complete its LGT report as well as of the Opinion on LTG measures and of the 2020 Solvency II review. The deadline for submission of the relevant information to national supervisors is 17 May 2019.
European Commission adopts Delegated Regulation amending Solvency II Delegated Regulation
On 8 March 2019, the European Commission published the Delegated Regulation (C(2019) 1900 final) it has adopted amending the Solvency II Delegated Regulation. The Delegated Regulation lowers the capital requirements for insurers' investments in equity and private debt. It also aligns the rules applicable to banks and insurers. It amends Solvency II by simplifying the calculation of capital requirements and updating principles and standards to reflect developments in risk management. The Delegated Regulation will be considered by the European Parliament and Council of the EU. It will enter into force 20 days after publication in the Official Journal of the EU and a number of its provisions will apply form 1 January 2020.
European Commission responds to ECON concerns about Solvency II Delegated Regulation
On 13 March 2019, the European Parliament's Economic and Monetary Affairs Committee (ECON) published a letter received from the European Commission (EC) relating to the review of the Solvency II Delegated Regulation (EU) 2015/35. The EC confirmed that it had taken ECON's concerns regarding:
- criteria for long-term equity investment
- perceived shortcomings in activation of the country component of the volatility adjustment
- lowering of risk margin, into account when completing its review of the Delegated Regulation
In particular in relation to long-term equity investments, the EC significantly reduced the minimum holding period requirement to five years and removed references to ring-fencing.
EIOPA publishes monthly technical information
On 6 March 2019, EIOPA published technical information on the symmetric adjustment of the equity capital charge, and relevant risk free interest rate term structures, for Solvency II purposes; with reference to the end of February 2019 in both cases.
EIOPA and its Members agree on No-deal Brexit Memorandum of Understanding with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA)
On 5 March 2019, EIOPA and all National Competent Authorities (NCAs) of the European Economic Area with competencies in insurance agreed Memoranda of Understanding (MoUs) with the PRA and the FCA. The MoUs will take effect in the event of a "No-deal Brexit" and provide for the reciprocal flow of appropriate and reliable information. The aim of the MoUs is to ensure continued strong and close cooperation between NCAs and the PRA and FCA.
EIOPA report on licencing approaches to InsurTech
On 27 March 2019, EIOPA published a report on best practices on licencing requirements, peer-to-peer insurance and the principle of proportionality in an InsurTech context. The aim of the report is to highlight (among other matters) emerging best practicing for NCAs. EIOPA notes that as InsurTech is constantly evolving, developments have to be monitored closely. EIOPA aims to facilitate engagement between NCAs and InsurTech firms to promote sound financial innovation in the European insurance and pensions market. .
EIOPA publishes 2017 year-end report on its comparative study on market and credit risk modelling under Solvency II
On 25 March 2019, EIOPA published a report setting out the conclusions of its comparative study on market and credit risk modelling under Solvency II. EIOPA reiterated that market and credit risk contribute to the solvency capital requirements of insurance undertakings. The report summarises the key findings from the comparative study undertaken during 2018 based on 2017 year-end information and provides an insight into the supervisory initiatives being taken by national competent authorities following the conclusions of this study. EIOPA confirmed that it will request information from insurance undertakings and prepare a similar comparative report for the year-end 2018.
6th Conference on Global Insurance Supervision (GIS) to be held on 4 and 5 September in Frankfurt am Main
The 6th Conference on GIS will take place in Frankfurt on 4-5 September 2019. This year's GIS conference will explore key topics of sustainability from a European and International insurance supervision perspective. (Participation at the conference is upon invitation only and registration will open in May 2019).
For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.
Date published: 16 April 2019