• Blog
  • 3 Min Read
  • September 23, 2015

EIOPA Solvency II Updates

Written by:
Georgie Patten, CA(SA)

EIOPA recently released the second set of Solvency II Guidelines addressed to the National Competent Authorities, including the UK’s PRA, Netherlands’ DNB, and Denmark’s FSA. The guidelines are intended to ensure common, uniform, and consistent application of Solvency II law and supervision across all European Union member states. Each national regulator has two months to confirm that they currently comply, or intend to comply, with the guidelines in time for the Solvency II 1 January 2016 effective date.

Clarity and Uncertainty

While these guidelines add some overall clarification, they also add uncertainty about individual country requirements. The guidelines contain requirements for additional report filings and tighter deadlines. Facing this uncertainty and the short time frame to produce these new reports, insurers must be vigilant in identifying the new requirements’ needed resources and processes.

Guidelines on Financial Stability Reporting

EIOPA released finalized guidelines on reporting for the purpose of financial stability. Much of the information requested is also required for Solvency II, though it is requested with earlier deadlines and increased frequency.

Insurers with more than €12 billion in total assets are required to file the following reports with their national regulator seven weeks after the end of the reference period:

EIOPA Solvency II

The first three years will be a transitional period, with ongoing deadlines:

  • Additional three weeks (to 10 weeks) for submitting quarterly, semi-annual, or annual information related to the year 2016
  • Additional two weeks (to nine weeks) for submitting quarterly, semi-annual, or annual information related to the year 2017
  • Additional one week (to eight weeks) for submitting quarterly, semi-annual, or annual information related to the year 2018

Guidelines on Reporting and Public Disclosure

EIOPA released finalized guidelines on the public disclosure requirement of the Solvency and Financial Condition Report (SFCR). EIOPA believes that public disclosure ‘is a unique opportunity for insurance and reinsurance undertakings to address stakeholders’ perception on perceived opaqueness and inadequacy of publically disclosed information.’ However, ‘only high quality disclosed figures and good public reports can fulfil the goals set out by Solvency II.’2

The guidelines set forth that, in addition to the SFCR reporting requirement, insurers must have a public disclosure policy. The policy should include:

  • Identification of the persons/functions responsible for preparing and reviewing the information publicly disclosed
  • Processes for completion of the disclosure requirements
  • Processes for review and approval by the administrative, management, or supervisory body (AMSB) of the SFCR
  • Identification of the information already available in the public domain that the insurance or reinsurance undertaking believes is equivalent in nature and scope to the information requirements in the SFCR
  • Specific information that the insurance or reinsurance undertaking intends to not disclose under the circumstances set out in Article 53 (1) of the Solvency II Directive
  • Additional information that the insurance or reinsurance undertaking has decided to voluntarily disclose under Article 54 (2) of Solvency II Directive

Clearwater is dedicated to keeping insurers up-to-date on regulatory changes that could impact their investment accounting and reporting. As Solvency II continues to evolve, we will continue to provide updates and best practice guidelines.

1. Need for high quality public disclosure: Solvency II’s report on solvency and financial condition and the potential role of external audit.

2. https://eiopa.europa.eu/Publications/Other%20Documents/
EIOPA_high%20quality%20public%20disclosure_Solvency%20II.pdf

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