Selected recent European Insurance news items of more general interest:
On 4 October, EIOPA published the first Single Programming Document (SPD) covering strategy for the next 3 years and tasks for 2017. This is a somewhat lengthy document, with some material of more interest to the regulator itself, that does not contain any shocks. I thought it worth noting the following content although some reiterates existing communications:
- The regulator is shifting its focus in the insurance area from regulation to supervision.
- (Solvency II) Work will be undertaken on the Reviews of the Standard Capital Requirements and the Long Term Guarantee measures and on simplicity and proportionality. They highlight the significance of ensuring RFR calculations are correct and look to develop a RFR automated calculation engine. EIOPA will continue its involvement with the International Association of Insurance Supervisors in its work on the International Capital Standards (ICS). [The ICS will be a measure of capital adequacy for Internationally Active Insurance Groups (IAIGs) and Global Systemically Important Insurers (G-SIIs). EIOPA state that "Solvency II can become a practical implementation [of these standards]".]
- EIOPA will work on Recovery and Resolution.
- "Engaging in preparatory exercises with its Members" to increase awareness on the stability of the financial system.
- (IDD) EIOPA will be delivering on four detailed empowerments in early 2017, together with one Regulatory Technical Standard, one Implementing Technical Standard and one set of Guidelines.
- Q1 2017 is the due date for EIOPA's Technical Advice to the Commission on Delegated Acts under IDD on: (i) Product Oversight and Governance (POG) (ii) conflicts of interest; (iii) inducements and (iv) assessment of suitability and appropriateness of insurance-based investment products (IBIPs) [see below].
- EIOPA ready to develop Level 3 guidance for implementation and application of POG arrangements.
- EIOPA is empowered under the IDD to develop delegated acts on suitability of IBIPs and will develop Level 3 guidance [see below].
- PRIIPs KID follow up to Level 2 work.
- Use of thematic reviews to "improve outcomes for consumers".
EIOPA's Insurance and Reinsurance Stakeholder Group has published their response to the IDD guidelines survey and also their comments on the Technical Advice on possible delegated acts. In the former, the group comments on IBIPs sold via execution-only and those they regard as non-complex. They state:
"Products that do not incorporate an unexpected loss for consumers and which are governed by a solid prudential framework (such as the Solvency II framework) should be considered as non-complex. In this context, not only with-profits contracts but also other products with guarantees, including hybrid products and unit-linked products with guarantees should be considered as non-complex."
Insurance Europe echoed some of the group's further comments on the advice stating the "Insurance Distribution Directive delegated acts must be consistent with original legislation."
As per the BBC website PM Theresa May "promised a "Great Repeal Bill" in the next Queen's Speech, to remove the European Communities Act 1972 from the statute book and enshrine all existing EU law into British law."
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