Life Assurance (Provision of Information) Regulations amended to avoid duplication with the PRIIPs Regulation
The Central Bank of Ireland (the Central Bank) has disapplied Regulation 7(2) of the Life Assurance (Provision of Information) Regulations 2001 in respect of life assurance products which fall within the scope of the PRIIPs Regulation (1286/2014/EU). The change takes effect from 1 January 2018. Regulation 7(2) allows certain standardised information to be provided to customers at pre-contract stage where it is not practicable to provide client-specific information. The Central Bank has explained that Regulation 7(2) is being disapplied to avoid any conflict with the standardised key information document (KID) which must be provided under the PRIIPs Regulation. Notably, the requirement to disclose client-specific information when issuing a policy has been retained.
Central Bank publishes Insurance Quarterly Newsletter
The Central Bank published the latest edition of its Insurance Quarterly Newsletter on 1 September 2017 (the Newsletter). The Newsletter features cyber risk and transparency / accountability in terms of how the Central Bank performs its functions. The Newsletter also reports that the Central Bank's annual insurance statistics (formerly known as the Blue Book) will no longer be published and will be replaced by the publication of Solvency & Financial Condition Reports on a new portal later this year. The Newsletter also provides a number of general updates such as, for example, the recent changes made to S.I No. 485 of 2015 (the Solvency II Regulations).
Central Bank publishes recent speeches by Silvia Cronin on insurance supervision
The Central Bank has published two speeches given by Silvia Cronin (Director of Insurance Supervision) during September 2017. In the first of those speeches (given to the OSG Vericlaim / Sedgwick Insurance Innovation Summit), Ms Cronin covered a range of topics from digital technology to organisational culture. Notably, Ms. Cronin signalled that a key focus in 2018 will be the development of onsite IT inspection capacity to ensure that undertakings embrace a sense of urgency in relation to cyber risk. In her second speech (given to a PWC / Insurance Ireland breakfast briefing), Ms. Cronin focussed on transparency and accountability and the drive for supervisory convergence across Europe.
Central Bank publishes industry presentation on internal models
The Central Bank has published the slides of a presentation given by Grace von Offenberg Sweeney (Head of Function, Actuarial) to the Internal Model Industry Forum established by the Institute of Risk Management on 7 September 2017. Amongst other things, the slides provide a high level snap shot of the Central Bank's approval process for internal model and its approach to ongoing supervision. The slides also highlight some feedback and observations on internal models (e.g. in relation to regulatory terms and conditions, validation and P&L attribution).
European Commission adopts Delegated Regulations supplementing the Insurance Distribution Directive
On 21 September 2017, the European Commission adopted two final draft Delegated Regulations supplementing the Insurance Distribution Directive (2016/97/EU) (IDD). The first Delegated Regulation (C2017/6229) supplements the information requirements and conduct of business rules applicable to insurance-based investment products (e.g. in relation to conflicts of interests, inducements and suitability assessments). The second Delegated Regulation (C2017/6218) supplements the product oversight and governance requirements which apply to insurance undertakings and other distributors under IDD (e.g. in relation to the product approval process).
European Commission amends CDR in relation to infrastructure corporates
The European Commission has amended Commission Delegated Regulation 2015/35/EU (CDR) in relation to the calculation of regulatory capital requirements for investments in infrastructure corporates. The amendments (which are set out in Delegated Regulation 2017/1542/EU) took effect on 15 September 2017. The objective of the amendments is to create conditions for growth in infrastructure investment by providing for appropriate risk calibrations for infrastructure corporates.
European Commission proposes enhanced role for EIOPA in relation to internal models
On 20 September 2017, the European Commission published a proposal for a Directive (COM 2017/537) amending, amongst other instruments, the Solvency II Directive (2009/138/EC). In particular, the European Commission proposes to enhance the role of the European Insurance and Occupational Pensions Authority (EIOPA) with regard to internal models through new provisions on co-operation and information sharing coupled with powers to adopt Opinions in relation to specific applications and the settlement of disagreements between supervisory authorities in relation to internal models.
EIOPA publishes second set of Solvency II statistics
On 18 September 2017, EIOPA published its second set of quarterly Solvency II statistics on the EU insurance sector and updated its related FAQs. The statistics provide country level information on balance sheets, own funds, premiums, claims and expenses based on reporting from solo (re)insurance undertakings for the fourth quarter of 2016. They also include a set of indicators based on financial stability reporting for the largest European insurance groups and undertakings on an aggregated basis.
EIOPA asks stakeholders to participate in developing a set of Questions & Answers on IDD
EIOPA has invited questions from stakeholders on the interpretation and application of IDD (including related delegated acts and implementing measures) to assist in the development of a set of Questions & Answers on IDD. Whilst not intended to have force of law, the Questions & Answers are being developed to clarify IDD requirements for the market and to promote common supervisory approaches. EIOPA has asked for questions to be submitted by close of business on 11 October 2017 through a survey published on its website.
EIOPA publishes Annual Work Programme for 2018
On 28 September 2017, EIOPA published its Annual Work Programme for 2018 which sets out its priorities for 2018 in working towards achieving its strategic objectives for the period 2017 to 2019. Among the numerous priorities listed are: (a) ensuring the consistent implementation of IDD across Europe; (b) reviewing Solvency Capital Requirements and the application of long term guarantees; (c) conducting insurance stress tests; and (d) further work on recovery and resolution. Notably, EIOPA has identified InsurTech as a "cross-cutting" theme for 2018 with the objective of promoting supervisory convergence in this area and pursuing a technology neutral approach to financial innovation.
EIOPA publishes recent speeches on global supervision and consumer protection
EIOPA recently published a speech given by Chairman Gabriel Bernardino to the 5th Conference on Global Supervision held in Frankfurt on 6 September 2017. In his speech, Mr Bernardino covered a range of topics relevant to global supervision from Solvency II and Brexit to InsurTech. On 4 September 2017, EIOPA also published a speech given by Manuela Zweimuller (Head of Policy) to the AZN Insurance Conference at Ljubljana on consumer protection with a particular focus on the impact of IDD and digitalisation.
Insurance Europe responds to EIOPA consultation on the Solvency II review
On 4 September 2017, Insurance Europe (IE) published a response to EIOPA's consultation on the first set of advice to the European Commission on the upcoming Solvency II review. EI acknowledges the progress made by EIOPA towards achieving the goals of the review. However, IE believes that additional work is required in a number of areas such as, for example, simplifications, risk-mitigation techniques, the look-through approach, undertaking specific parameters and the loss-absorbing capacity of deferred taxes.
Insurance Europe recommends grandfathering of existing insurance contracts post-Brexit
IE recently published a position paper recommending a post-Brexit grandfathering arrangement for insurance contracts issued by insurers under the EEA passporting regime prior to Brexit. In its paper, IE calls on the UK and the European Union to agree a grandfathering arrangement as part of their Article 50 negotiations enabling insurers to continue servicing existing contracts post-Brexit until they are run off in order protect and avoid disruption to customers. IE does not believe that other potential options (e.g. portfolio transfers or transitional measures) offer the same level of certainty or customer protection particularly as regards longer term business.