Financial Services Regulation & Compliance - Insurance October 2018
Department of Finance publishes feasibility study into claim-by-claim register
On 18 October 2018, the Department of Finance published its Report on the Feasibility of an Insurance Claim-by-Claim Register. This implements one of the recommendations of the Cost of Insurance Working Group (CIWG), which, among other matters, recommended (a) the establishment of a National Claims Information Database (NCID) (which will collect and make available aggregate claims data), and (b) a feasibility study into a claim-by-claim register. The Report concludes that a claim-by-claim register should not be pursued in light of it providing limited added value (taking into account other proposed measures, including the NCID) and concerns in respect of data protection, costs and administrative burden.
EIOPA publishes decision on co-operation in supervision of cross-border insurance distribution
On 10 October 2018, the EIOPA published a Decision on the co-operation of national competent authorities (NCAs) in respect of the supervision of cross-border insurance distribution activities of insurance undertakings and intermediaries. The Decision, which replaces the former Luxembourg Protocol, reflects recent supervisory experience with cross-border insurance distribution activities and the regulatory framework under the Insurance Distribution Directive (IDD) (Directive 2016/97/EU). It aims to strengthen co-operation between NCAs and enhance the exchange of relevant information.
EIOPA requests feedback on illiquid liabilities
On 29 October 2018, EIOPA published a Request for Feedback (RFF) on methodological considerations regarding illiquid liabilities. According to the RFF, illiquidity characteristics may contribute to the ability of insurers to mitigate short-term volatility by holding assets throughout the duration of the commitments, even in times of market stress. The RFF asks stakeholders for feedback on the envisaged approaches to assess the illiquidity characteristics of insurance liabilities, the actual holding periods of assets of insurers, and the risks of holding assets over a longer term. Comments are invited until 7 December 2018. Feedback from the RFF will be used to prepare an information request to insurers that is expected to issue in early 2019.
EIOPA publishes speech on EIOPA's achievements, needs and challenges
On 8 October 2018, the EIOPA Chairman, Gabriel Bernardino, delivered a speech to the Economic and Monetary Affairs Committee (ECON) of the European Parliament concerning EIOPA's recent achievements, future needs, and challenges. Mr Bernardino focussed on the topic of supervisory convergence and EIOPA's belief that the EIOPA Regulation (Regulation (EU) No 1094/2010) should be strengthened with a mandate to perform evaluations of national supervisory practices, such as in the area of internal models, and to act more intrusively when it detects early signs of cross-border risks. An accompanying report on EIOPA's Key Achievements over the past 12 months was also published.
EIOPA publishes results of work of EU/US Insurance Dialogue Project for 2018
On 31 October 2018, EIOPA published a number of papers prepared by the EU/US Insurance Dialogue Project in the areas of:
(a) insurance industry cybersecurity
(b) the cyber insurance market
(c) big data, and
(d) supervision of intra-group transactions.
The papers will serve as a basis for panel discussions at the EU/US Insurance Project public forum on 10 November 2018.
EIOPA publishes risk dashboard for second quarter 2018
On 22 October 2018, EIOPA published its updated risk dashboard for the second quarter of 2018. This is EIOPA's quarterly risk assessment based on financial stability and prudential reporting from EU insurance groups and solo undertakings.
Key observations include:
- risk exposures for the insurance sector remained stable during Q2 2018
- bond market volatility has declined since June
- overall profitability has been stable with Solvency Capital Requirement ratios above 100% for most insurers; and
- market perceptions were mixed with insurance stocks outperforming the market but increasing concern regarding market mispricing of risks.
For further information please contact a member of the Financial Regulation team.
Date published: 8 November 2018