Solving Solvency II

Solving Solvency II

Steven Francis, a partner in the financial services group at Baker & McKenzie LLP, takes us through first set of Solvency II Guidelines issued by the European Insurance and Occupational Pensions Authority (EIOPA) which are currently out for consultation.

National Competent Authorities are provided with guidance on what insurance or reinsurance undertakings they should consider in order to approve the use of an internal model for the calculation of the Solvency capital requirement, under new guidelines being consulted on by EIOPA. EIOPA is inviting comments on the first set of guidelines and their impact assessment for Solvency II. The proposed guidelines have been developed based on European Parliament and Council Directive 2009/138/EC (known as Solvency II) and the current Commission Delegated Acts containing the draft implementing measures. Comments on the proposals should be received by 29 August 2014.

How are the guidelines being consulted on?

The guidelines are to be found on EIOPA’s website. There is a comments template that should be used. A point to note is that firms commenting should make it clear whether they wish the comments to be confidential. General comments can also be provided.

What does the consultation paper on pillar 1 guidelines cover?

The consultation on pillar 1 requirements covers:

  • technical provisions
  • own funds, including:
    • ancillary own funds
    • classification of own funds
    • ring-fenced funds
    • related undertakings, and
  • solvency capital requirements including:
    • catastrophe risk
    • life underwriting risk
    • market risk
    • basis risk
    • the look-through approach
    • undertaking specific parameters
    • the loss absorbing capacity of technical provisions
    • deferred tax and group solvency calculation

What does the consultation paper on internal models guidelines cover?

The internal models guidelines aim to provide guidance on the steps supervisory authorities and (re-)insurance

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author: