Tracker, Financial Services Regulation & Compliance - Insurance

CBI consults on guidance regarding external audit of Solvency II returns/disclosures 

On 1 June 2016, the Central Bank of Ireland (CBI) published Consultation Paper 104 on External Audit of Solvency II Regulatory Returns/Public Disclosures.  Amongst other matters, the proposed guidance outlines (a) the scope of the required audit (capital requirements templates of undertakings using approved full internal models are excluded), (b) that auditors will perform certain audit procedures in respect of opening balances under Solvency II, (c) a list of Quantitative Reporting Templates (QRT) to be audited at a solo level and in the case of groups in scope and (d) that QRTs on balance sheet, technical provisions and claims, long-term guarantees, own funds, the SCR and MCR will be included in scope. The CBI intends to require the annual external audit for financial years ending on or after 31 December 2016.  Responses are invited until 29 July 2016. The CBI hopes to finalise its position by 30 September 2016.

Brexit – Insurance Ireland reactions 

On 24 June 2016, Insurance Ireland announced that it was reviewing the outcome of the Brexit referendum.  On 27 June 2016, it issued a press release calling for a dedicated stakeholder consultative forum for the finance and insurance sectors to help inform the Irish Government's approach to the UK's anticipated exit from the EU.  Insurance Ireland views such a forum as essential to protect Ireland's interests in those sectors.

Workplace Relations Commission – insurer rebuts alleged indirect discrimination

On 26 May 2016, Workplace Relations Commission (WRC) examined a complaint/dispute whereby a Polish national holding an EU licence had been quoted a higher motor insurance premium than would have been the case had he been the holder of an Irish (or UK) licence.  The WRC found (in Marcin Wilkocki v Allianz PLC, Decision No. DEC-S2016-032) that, while indirect discrimination had been prima facie established, the insurer had rebutted this inference on the facts.  This was primarily because the insurer satisfied the WRC that (a) its business and pricing process did not, in fact, treat the complainant different on grounds of nationality and (b) reliable actuarial and statistical data was available to support the insurer's approach to the type of licence involved (i.e. EU licence).  

Insurance compensation  - update on taskforce activity

On June 8 2016, speaking in the Dáil (on a motion calling for establishment of an independent motor insurance task force), the Minister for Finance commented on the activities of the Department's taskforce (which is currently reviewing insurance sector policy, in consultation with the Central Bank of Ireland (CBI) and other parties).  He confirmed that the taskforce would report to him shortly on the insurance compensation framework; and that its work would be completed in the coming months (including an examination of the factors that have led to increased motor insurance costs). 

CBI publishes Insurance Quarterly newsletter

On 29 June 2016, the CBI published the first edition of its Insurance Quarterly newsletter. This includes details regarding (a) the success of initial Solvency II reporting, (b) a review of reports submitted as part of the CBI's 2015 forward looking assessment of own risk (FLAOR), (c) policy papers published by the CBI, (d) an update on the work of EIOPA, (e) upcoming deadlines and (f) recent CBI speaking engagements and publications.

Insurance Ireland issues statement on insurance costs debate

On 8 June 2016, Insurance Ireland issued a statement welcoming the current debate on rising costs of insurance.  This called for a number of urgent actions to be taken to address the costs of insurance, including (a) strengthening the Personal Injuries Assessment Board, (b) international benchmarking of awards, (c) addressing the impact of the failure of Setanta Insurance and (d) increasing road traffic enforcement.

CBI presentation on the role of the Head of Actuarial Function

On 20 June 2016, the CBI presented to the Society of Actuaries in Ireland in relation to Consultation Paper 103 on Guidance for (Re)insurance undertakings on the Head of Actuarial Function Role (HoAF).  The presentation explored certain issues such as (a) the HoAF's opinion on underwriting policy, reinsurance arrangements and Own Risk and Solvency Assessment (ORSA), (b) the HoAF's contribution to the risk management system and (c) the calculation of capital requirements. 

CBI presentation on General Insurance Update

On 2 June 2016, the Insurance Directorate of the CBI presented an update on current issues and general insurance at the Annual Forum of the Society of Actuaries.  Items of note include the performance of the general insurance sector, with a particular emphasis on the motor insurance industry. 


European Commission Implementing Regulation on risk-free rate

On 3 June 2016, the Implementing Regulation on the risk-free rate under the Solvency II Directive was published in the Official Journal of the EU.  This confirms the technical information to be used (for calculation of technical provisions and basic own funds) for reporting with reference dates from 31 March to 29 June 2016.  The Implementing Regulation entered force on 4 June 2016 and applies from 31 March 2016.

EIOPA - final report on proposal to amend ITS on templates for the submission of information

On 31 May 2016, the European Insurance and Occupational Pensions Authority (EIOPA) published its final report on proposed amendments to (a) Implementing Technical Standards (ITS) on the templates for the submission of information to national supervisors and (b) EIOPA's Guidelines on Reporting and Disclosure.  The proposed amendments follow changes made to Commission Delegated Regulation (EU) 2015/35 regarding insurers' investments in infrastructure (and other matters). They also seek to correct a number of minor drafting and typographical errors in the ITS.  The European Commission has three months (extendable by a further month) to decide whether to endorse the proposed amendments.

Insurance Europe publishes insight briefing on in-vehicle data

On 15 June 2016, Insurance Europe published an insight briefing arguing that no unnecessary restrictions should be imposed on drivers' ability to share their in-vehicle data with service providers.  Insurance Europe argues that more in-vehicle data would enable insurers to offer a wider range of innovative services; and that an appropriate platform for sharing such data should be created.

EIOPA & China's insurance regulator - memorandum of understanding

On 15 June 2016, EIOPA announced that it signed a Memorandum of Understanding (MoU) with the China Insurance Regulatory Commission (CIRC). The aim of the MoU is to facilitate cooperation between EIOPA and the CIRC in the following areas (a) building a framework for the exchange of supervisory information, (b) mutual updating on developments in the regulatory and supervisory frameworks for insurance and pensions, and (c) increasing mutual understanding on the Chinese (C-ROSS) and European (Solvency II) supervisory regimes for insurance.  Joint activities for EIOPA and the CIRC are also envisaged, e.g. annual work programmes and expert task forces.  EIOPA and the CIRC highlight that the MoU does not create legal obligations.

Insurance Europe views on country-by-country reporting of tax disclosures

On 8 June 2016, Insurance Europe published a paper regarding the European Commission's proposal to introduce a public country-by-country reporting of tax disclosures (via a suggested amendment to the Accounting Directive).  Insurance Europe does not support the Commission's initiative and believes that the current proposal undermines the objectives of the multilateral agreement on the automatic exchange of country-by-country reports between national tax authorities.  Its concerns include that (a) additional transparency requirements which go beyond the OECD's BEPS recommendations would increase compliance burdens for companies and (b) competitiveness of the EU (by contrast to non-EU jurisdictions) may be harmed.  

EIOPA publishes its Annual Report 2015

On 15 June 2016, EIOPA published its annual report for 2015.  This highlights EIOPA's completion of the regulatory phase of Solvency II and preparations to shift its focus to ensuring EU supervisory convergence. The report details initiatives that EIOPA has implemented to seek to achieve its strategic goals, including to (a) to strengthen consumer protection, (b) deliver quality and timely regulation, (c) ensure convergence, consistency and quality of supervision, (d) support financial stability and (e) develop as a modern and competent authority.

Insurance Europe publishes motor insurance addendum

On 15 June 2016, Insurance Europe published an addendum to its European Motor Insurance Markets (originally published in November 2015 and capturing data up to 2013 (inclusive)).  The addendum is based on 2014 data in the areas of motor, motor third-party liability and damage premiums and claims expenditure. The new data confirms substantial differences in motor claim costs and frequency between EU member states (resulting in variations in premiums as between those jurisdictions).

EIOPA publish Financial Stability Report

On 21 June 2016, EIOPA published its 2016 Financial Stability Report on the insurance sector in the EEA.  Items of note include EIOPA's analysis of the performance of the non-life insurance, life insurance and reinsurance markets and detail on technological developments in the insurance sector. Amongst other matters, the report notes that growth has been higher in the non-life sector than the life sector, that there is continued over-capacity in the reinsurance market and that digital customer experience does not yet match technological developments.

Videos of the 8th International Insurance Conference now available

On 14 June 2016, Insurance Europe made videos available (on its YouTube channel) from various sessions and speeches during its 8th International Insurance Conference (held in Dublin on 25 May 2016).  This includes panel discussions and the parallel session on technological advances and distribution channels of tomorrow.

For further information please contact a member of the Financial Regulation team

Date published: 04 July 2016