Selected recent European Insurance news items of more general interest:
On 8 March, the European Commission adopted a new version of the regulatory technical standard (RTS) for PRIIPs, following a rejection of the last version on some specific points by the European Parliament. The new version is now under scrutiny by the European Parliament and the Council. This is in principle for three months, though the scrutiny period may be shortened. The RTS then would become law and be published in the Official Journal of the European Union. This could happen by the end of April. The ESAs will publish Q&A material to support the implementation of the PRIIPs KID as soon as possible after the RTS have been published in the Official Journal.
The Commission's amendments to the Delegated Regulation concern multi-option PRIIPs, performance scenarios, comprehension alert and presentation of administrative costs in relation to biometric components of insurance-based investment products.
Significant detail is contained in the annexes which cover the following:
- Template for the key information document.
- Methodology for the presentation of risk.
- Presentation of SRI (summary risk indicator).
- Performance scenarios (favourable, moderate, unfavourable and stress).
- Methodology for the presentation of performance scenarios.
- Methodology for the calculation of costs.
- Presentation of costs.
The PRIIPs KID Regulation and the RTS apply from 1 January 2018.
Contact OAC to get further information on how we can support you with the following:
- Advisory Service
- Calculation Service
- KID Production Service
On 1 March, EIOPA published "Year-end report 2016 on functioning of colleges of supervisors and priorities for 2017." EIOPA concludes that there are "Visible improvements but still a way to go to put the paradigm change towards risk-based supervision to life." Colleges of Supervisors refer to multilateral groups of relevant supervisors that are formed for the collective purpose of supervising financial institutions operating across borders.
At the end of February, the Financial Stability Board (FSB) reviewed a summary by the Task Force on Climate-related Financial Disclosures (TCFD) of responses to its public consultation. The TCFD’s final report will provide a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders, and insurance underwriters about their climate-related financial risks. The report and recommendations will be published in June and presented to the G20 Leaders’ Summit.
EIOPA's Insurance & Reinsurance Stakeholder Group (IRSG) have made available the presentations from their meeting of February 2017. The topics covered included:
- Recovery and resolution (see European Insurance: Solvency II (13 March 2017)).
- Big data, retail risk indicators, and consumer trends (see European Insurance: General (16 January 2017) and European Insurance: General (19 December 2016)).
- Environmental or social PRIIPs (see European Insurance: General (14 February 2017)).
- Long-term guarantees (see European Insurance: Solvency II (13 March 2017)).
- Update on International Capital Standard.
- Solvency capital requirement (see European Insurance: Solvency II (12 December 2016)).
- Insurance Distribution Directive (see European Insurance: General (14 February 2017)).
These can provide useful background on certain topics and relate to topics where the IRSG is asked for views/opinions. The solvency capital requirement presentation includes draft responses on various aspects of the standard formula contained in EIOPA's discussion paper. Of particular note, the risk margin responses include "current specification... is inappropriate, in particular for long-term life insurance business where the methodology and assumptions result in an excessive risk margin," "... excessively volatile with respect to interest rates" and "the prescribed cost of capital (6%) is excessive".
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