European Insurance: Solvency II (19 September 2016)

OAC Digest
EU / European Parliament / EIOPA, HM Treasury, Investments, Life insurance, Solvency II

19 September 2016

Selected recent Solvency II news items: 

On 14 September, the EC published a communication setting out the next steps to "accelerate the completion of the Capital Markets Union (CMU)" and called on the European Parliament and the Council to "rapidly finalise the first wave of proposed measures." Amendments to Solvency II legislation regarding infrastructure projects and ELTIFs took effect in April 2016 and the assessment of infrastructure corporates is ongoing.  The Commission intends to issue a proposal on the debt-equity bias in November, in the context of its proposal on the Common Corporate Tax Base (CCTB) as part of the assessment of the prudential treatment of private equity and privately placed debt in Solvency II. A vote in ECON Committee on the proposal on simple, transparent and standardised (STS) securitisations is expected in November 2016. The Commission has also announced its intention to revise capital charges for insurers' investments in STS securitisations under Solvency II. 

On 13 September, the Treasury Committee launched an inquiry into Solvency II Regulation and the UK's related options following the EU Referendum result. This was covered in detail in OAC's recent news item. It should be noted that the House of Lords EU Financial Affairs Sub-Committee is investigating the implications of Brexit for the UK and EU financial services industry and has been taking evidence since 7 September.

On 10 September, Commission Implementing Regulation (EU) 2016/1630 of 9 September 2016 was published in the Official Journal of the European Union. The regulation lays down lays down the implementing technical standards with regard to the procedures for the application of the transitional measure for the equity risk sub-module. This measure permits, but does not require, firms to phase in the effect of the standard stress factor in the equity risk sub-module. The procedures are not required when the stress factor is applied in full.   

David Gray

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David Gray
Consultant Actuary

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