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Financial Services Regulation and Compliance - Insurance April 2024

Insurance & Reinsurance

Financial Services Regulation and Compliance - Insurance April 2024

Tue 21 May 2024

6 min read


Domestic: Supreme Court found personal injury guidelines legally binding.

European: The European Parliament approved certain amendments to Solvency II and the proposed text for Insurance Recovery and Resolution Directive. EIOPA launched a public consultation on reassessing natural catastrophe risks in the standard formula along with a stress test designed to examine (re)insurers’ resilience to a range of acute economic shocks.


CBI – Latest NCID Report (Employers’/Public Liability, Commercial Property)

The Central Bank of Ireland (CBI) has published its third National Claims Information Database (NCID) report on employers’ liability (EL), public liability (PL) and commercial property (CP) insurance. The report captures data up to 31 December 2022 including information on premium amounts, settled claim amounts and the impact of the person injuries guidelines (the guidelines) on settled claim costs. Key findings include that, in 2022:

Supreme Court ruling on personal injuries guidelines

The Supreme Court of Ireland recently ruled (Delaney v PIAB & Ors) that the personal injuries guidelines adopted by the judiciary under the Judicial Council Act 2019 are legally binding. The Plaintiff had challenged the constitutionality of the 2019 Act which empowered the Judicial Council to adopt the guidelines. The Supreme Court held that while provisions in the 2019 Act were unconstitutional, the guidelines had been given legislative effect by the Oireachtas. The decision provides enhanced certainty and predictability and has been welcomed by Insurance Ireland.


EIOPA launches 2024 stress test

The European Insurance and Occupational Pensions Authority (EIOPA) launched its 2024 stress test on 2 April 2024, designed to examine (re)insurers’ resilience to a range of acute but plausible economic shocks. In particular, the stress test scenarios include continued (and heightened) geopolitical tensions together with a broad range of knock-on effects (e.g., supply chain disruption, limited growth and inflationary pressures). The 48 participating (re)insurers are required to calculate their results based on the prescribed scenarios by mid-August 2024 with results to be published by EIOPA in December 2024.

EIOPA report on Supervisory Activities in 2023

EIOPA published its annual report summarising its supervisory activities for the year 2023 on 30 April 2024 (the report). The report provides a summary of EIOPA’s key consultations, supervisory statements issued, supervisory convergence tools implemented, and main deliverables achieved during 2023. Alongside oversight of national supervisors, key areas of focus for EIOPA in 2023 included:

NatCat risks in standard formula – EIOPA begins consultation

EIOPA launched a public consultation on reassessing natural catastrophe risks in the standard formula on 3 April 2024. EIOPA is mandated to review at least every five years (and consider recalibrations for any significant discrepancies). EIOPA recommends adjustment of the way in which certain perils and risk factors are taken account of (owing to more recent evidence available since the latest review in 2018). Among other matters, EIOPA focuses on flood, hail, earthquake, windstorm and subsidence in this regard. One example called out by EIOPA is flood risk in Ireland. Feedback is invited until 20 June 2024.

EIOPA - Final paper on third-country reinsurers published 

EIOPA has issued its final supervisory statement on reinsurance concluded with third-country reinsurers (the statement). The statement, published on 4 April 2024, is addressed to national supervisors and focuses on potential risks arising from third-country reinsurance. EIOPA outlines its supervisory expectations in a number of areas. These include assessment of:

On the same date, EIOPA published an impact assessment on the supervision of third-country reinsurance and a feedback statement relating to its public consultation on the topic last year.

EIOPA study on market and credit risk modelling

EIOPA published the results of its latest study on market and credit risk modelling under Solvency II on 12 April 2024. This captures data from 2022 that was submitted to national supervisors by insurers. The study is carried out annually to maintain an understanding of modelling approaches. Consistent with prior results, EIOPA reiterated that market and credit risk contribute significantly to the solvency capital requirements of insurers. The study notes that a variety of modelling techniques continue to be used due to differences in business models, risk profiles and the freedom of modelling allowed under Solvency II.

EIOPA examines IFRS 17 implementation

On 15 April 2024, EIOPA published a report that analyses how EU (re)insurers have implemented IFRS 17 since its introduction in January 2023. The adoption of IFRS 17 was intended to increase reliability, transparency, and harmonisation in financial statements. The report is derived from information in financial statements from a sample of 53 (re)insurance groups across 17 Member States (relating to the first six months of 2023). The report notes that key impacts of the shift to IFRS 17 include changes to the value of insurance liabilities and the introduction of the contractual service margin.

EIOPA publishes monthly technical information for Solvency II

On 4 April 2024, EIOPA published its monthly technical information regarding the relevant risk-free interest rate term structures with reference to the end of March 2024, for Solvency II purposes. This information is used for the calculation of technical provisions for (re)insurance obligations. On the same date, EIOPA also published technical information on the symmetric adjustment of the equity capital charge under Solvency II with reference to the end of March 2024.

EIOPA speech on ESG delivered at IIF 2024

On 16 April 2024, EIOPA’s chairperson delivered a speech at the “IIF 2024 – ESG in Insurance” Conference in Vienna. The speech touched on the importance of ESG within the EU’s regulatory and supervisory framework for insurers and acknowledged the challenges posed by looming as well as current environmental risks. EIOPA called on insurers to contribute to the fight against climate change by:

Solvency II amends and IRRD approved by European Parliament

Certain amendments to Solvency II and the proposed text for Insurance Recovery and Resolution Directive (IRRD) have been approved by the European Parliament. The Solvency II amendments aim to enable (re)insurers to potentially release capital which may then be utilised for other purposes (including investment aligned with the European Green Deal). In addition, the amendments seek to introduce simplified/proportionate rules for low risk profile undertakings, increase the powers of national supervisors where (re)insurers are in deteriorating financial positions and require (re)insurers to more effectively account for sustainability-related risks. The amended IRRD gives national supervisors preventive powers to step in at early stage in respect of failing (re)insurers by requiring Member States to set up national insurance resolution authorities to manage these failures. The amendments must now be approved by the European Council and ultimately published in the Official Journal.

For more information on these topics please contact any member of A&L Goodbody's Insurance & Reinsurance team.

Date published: 21 May 2024