The European Insurance and Occupational Pensions Authority (EIOPA) submitted today to the European Commission three draft technical standards and published one set of revised guidelines to support the implementation of the reviewed Solvency II Directive.
The altogether four policy documents published today cover aspects ranging from the identification of insurance undertakings under dominant or significant influence to the criteria for determining the relevance of undertakings in the context of supervising cross-border activities. The European Commission is to decide within three months whether to adopt the draft technical standards. Once adopted, they will guide the implementation of Solvency II framework’s new features, improving supervisory cooperation and effectiveness.
On undertakings under dominant/significant influence or managed on a unified basis
These draft Regulatory Technical Standards (RTS) specify factors for identifying insurance undertakings that are under dominant or significant influence, as well as those managed on a unified basis. These factors are relevant for supervisory authorities to identify and effectively supervise insurance groups.
On the relevance of cross-border activities of undertakings
The Solvency II review introduces new rules to enhance cooperation and information exchange between home and host supervisors in case of significant cross-border activities. These RTS set out the conditions and criteria that need to be considered by host supervisors when determining the relevance of cross-border activities for their market.
On the lists of regional governments and local authorities’ exposures
These Implementing Technical Standard (ITS) provide updates to the list of regional governments and local authorities. Insurers’ exposures to entities in the list should be treated like exposures to central governments when calculating capital requirements, meaning that they should receive a risk factor of 0% for spread risk and concentration risk in the standard formula.
On undertaking-specific parameters
The revised Guidelines on undertaking-specific parameters – that can replace standards parameters in standard formula capital requirement calculations – correct outdated legal references and streamline the guidelines without changing their intended meaning. In line with EIOPA’s balanced approach to simplifying regulation, the number of individual guidelines is reduced by 21%.