The European Insurance and Occupational Pensions Authority (EIOPA) issued today a recommendation to Bulgaria’s Financial Supervision Commission (FSC – Комисия за финансов надзор), urging the supervisor to review its supervisory processes regarding the assessment of (re)insurers’ solvency positions.
EIOPA issues the present recommendation following a review by the FSC of a Bulgarian reinsurance undertaking’s solvency simulation. In EIOPA’s view, the review was too superficial and did not reflect the due diligence expected of a supervisor when verifying the solvency of a supervised entity proportionate to the nature, scale and complexity of the situation.
EIOPA therefore urges the FSC to revise its supervisory review process regarding the verification of undertakings’ and groups’ solvency position to ensure – under a prospective and risk-based approach proportionate to the nature, scale and complexity of the undertaking – that (re)insurance undertakings under its supervision are compliant on a continuous basis with the regulatory solvency requirements.
Next steps
FSC has two months after the issuance of this Recommendation to confirm to EIOPA whether it complies or intends to comply with this Recommendation.