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The CBI removes Solvency II external audit requirements for captive (re)insurance undertakings
The Central Bank of Ireland (CBI) has published updated guidance which removes captive insurance and reinsurance companies from the scope of the requirement for external audit of Solvency II regulatory returns and public disclosures.
This update is aligned with the proportionality measures for captives anticipated as part of the Solvency II’s new proportionality framework.
The exception to the requirement for captive (re)insurance undertakings comes into effect for financial years ending on or after 30 April 2025.
EIOPA publishes approach to supporting the objective of simplifying regulation and reducing administrative burdens for enhanced European competitiveness
On 8 April 2025 the European Insurance and Occupational Pensions Authority (EIOPA) published a note outlining its views for better regulation and supervision. The approach aims to strike a balance in supporting the objective of simplifying regulation and the reduction of administrative burdens in a balanced manner amid the push for EU competitiveness among global competitors.
As highlighted in the European Commission’s Competitiveness Compass, competitiveness is being pursued through a process of regulatory simplification and burden reduction. EIOPA is keen that any simplification initiative be undertaken in a holistic way so as to avoid potential regulatory divergence across Member States and prevent fragmentation of the Single Market. EIOPA believes that simplification and burden reduction could be a catalyst for growth by helping the EU economy allocate resources more efficiently.
EIOPA outlined a number of ways in which it has been advancing regulatory simplification in its work including:
EIOPA confirms Bulgaria Financial Supervision Commission compliant with recommendation
On 13 January 2025, EIOPA published a recommendation to Bulgaria’s Financial Supervision Commission (FSC) urging it to review its supervisory processes regarding the assessment of (re)insurers’ solvency position. Following a solvency simulation, EIOPA viewed the FSC’s process as too superficial and not reflective of the due diligence expected of a supervisor verifying the solvency of a supervised entity (proportionate to the nature, scale and complexity of the relevant entity).
On 25 April 2025 EIOPA confirmed that the FSC had improved its supervisory review process regarding the verification of undertakings’ and groups’ solvency positions in order to be fully compliant with the recommendation issued in January.
EIOPA launches set of six consultations re IRRD
On 29 April 2025, EIOPA launched a set of six consultations related to the implementation of the European Union’s Insurance Recovery and Resolution Directive (IRRD). The IRRD, which is set to become operational in 2027, introduces a recovery and resolution framework for (re)insurers in Europe which aims to limit the occurrence and impact of the failure of (re)insurers.
The consultations propose draft guidelines and technical standards that will go on to form the practical implementation of the IRRD. The areas EIOPA is consulting on include:
EIOPA has invited stakeholders to provide feedback on each of the consultation papers by responding to the questions posed via online surveys which will remain open until 31 July 2025.
EIOPA consultation - group supervision, related undertakings and volatility adjustments
EIOPA has launched a series of public consultations related to its review of Solvency II. The first consultation concerns the EIOPA mandate to specify exceptional circumstances in which it may be justified to exclude undertakings from the scope of group supervision. The second consultation presents amendments to the guidelines on the treatment of related undertakings, including participations.
As part of the Solvency II Review, EIOPA has also updated its opinion on the supervisory assessment of internal models including a dynamic volatility adjustment published in 2017. The third consultation in the series invites feedback on the proposed amendments to the opinion.
Stakeholders are invited to provide feedback to the consultations no later than 26 June 2025. EIOPA will then consider the feedback received before publishing a final report on the consultations and submitting the revised opinion for adoption by the board of supervisors.
EIOPA publishes costs and past performance report
In April EIOPA published a report analysing the costs, charges and value for money characteristics of retail investment products within EIOPA’s remit over the period 2020 to 2023.
Overall, insurance based investment products (IBIP) achieved positive net returns over the four-year period, but nevertheless failed to keep pace with the recent high inflation. The report reveals that costs of IBIPS remain high, limiting the potential value of some products, with the value of IBIPS being highly dependent on the risk profile of the product and consumers' overall investment objectives.
The trend towards sustainable investing continued to gain momentum in 2023, with equity funds with environmental, social and governance (ESG) features delivering better returns than those without ESG features. The IBIPs market has seen a notable increase in the adoption of ESG products with 55% of products in the sample now incorporating ESG features. Member States such as Sweden, Norway and Belgium present the highest proportion of product with ESG features whereas Ireland, Romania, Spain and Malta present some of the lowest. Interestingly however, the number of products meeting the criteria to disclose under Article 9 of the Sustainable Finance Disclosure Regulation remains very low.
EIOPA publishes insurance risk dashboard
EIOPA has published its April 2025 insurance risk dashboard based on Solvency II data for Q4 2024 and Q1 2025. The dashboard aims to illustrate the principal risks in the EU insurance sector through data gathered from insurance groups and undertakings within the EU. The dashboard covers a wide range of risks from credit to ESG-related risks.
The dashboard shows that risks are currently stable in the EU's insurance sector. However, there are persistent vulnerabilities stemming from high market volatility and an uncertain geopolitical environment. At a macro risk level, while the economic outlook may brighten depending on the direction of policy of global actors, ongoing uncertainty about the commitment to free trade and international cooperation continues to weigh on current sentiment and may affect the broader macroeconomic landscape.
For more information on these topics please contact any member of A&L Goodbody's Insurance & Reinsurance team.
This publication provides an overview of certain legal and regulatory developments that may be of interest to certain entities. It does not purport to provide analysis of law or legal advice and is strictly for information purposes only.