European Insurance: General (5 December 2016)

OAC Digest
EU / European Parliament / EIOPA, Investments, Life insurance, Non-Life, PRIIPs

05 December 2016

Selected recent European Insurance news items of more general interest: 

On 2 December, EIOPA published a Discussion Paper on "Potential Harmonisation of Recovery and Resolution Frameworks for Insurers" setting out four main building blocks for the framework. As per the Bank of England: "Currently, insurers that are designated as systemically important by the Financial Stability Board must develop recovery and resolution plans. In addition, .... The PRA’s Fundamental Rules apply to all regulated firms and Fundamental Rule 8 states that a firm must prepare for resolution." The framework aims for minimum harmonisation, allowing Member States to adopt higher national standards. The paper suggests smaller firms outside Solvency II could be outside the scope, with Solvency II firms in scope. The discussion closes on 28 February 2017.   

On 2 December, the European Commission published a report on "green bonds". This label "signifies a commitment to exclusively use the funds raised to finance or re-finance "green" projects, assets or business activities." Promoting green finance is a priority under the Capital markets Union Plan. The report considers the risks and acknowledges the potential controversy were capital charges changed to favour investments in green bonds - one of the measures suggested to boost demand.  The report notes the relatively rapid growth in the market but also the currently small market share - 0.13% of the global bond market.  

On 1 December, the European Parliament voted in favour of deferring the introduction of the PRIIPs regulation. The regulation requires manufacturers of packaged retail and insurance-based investment products (PRIIPs) to produce a key information document ('KID').  The legislation is expected to apply from 1 January 2018.

David Gray

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David Gray
Consultant Actuary

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