The consultation papers relate to large elements of pillars 1 and 2, comprising Guidelines in the following five areas:
- Pillar 1;
- Use of Internal Models;
- System of governance and own risks and solvency assessment (ORSA);
- Supervisory Review Process; and
- Methodology for Equivalence Assessments.
As the first wave of implementing technical standards related solely to various approval processes, insurers would be forgiven for assuming that the first wave of Guidelines would cover similar material. However, the list above shows that these papers are far more wide-reaching and will be relevant to all insurers who must read this material carefully to understand the full ramifications for their business.
Although the delegated acts are not yet publicly available, EIOPA have published a separate annex, of over 100 pages, including the relevant draft articles to which the Guidelines relate. This will assist those who have not seen the latest draft requirements.
The five papers include over 500 individual Guidelines that the national competent authorities will need to make their best efforts to adopt, if they are not materially changed post consultation. This will follow the usual comply or explain route.
The material has relevance to all firms that will need to comply with Solvency II. As well as the Guidelines themselves, the papers include extensive explanations to help firms understand the requirements. These papers make public for the first time much of the material that was subject to private pre-consultation, giving the same insight now to all firms.
The response deadline is 29 August.
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