- EIOPA release interim measures draft guidance
- Key aspects of Solvency II could apply from 1 January 2014
- Reporting proposals more onerous than expected
The European Insurance and Occupational Pensions Authority (EIOPA) today released four consultation papers providing the detail of its proposed interim measures guidelines, which it proposes should be adopted by national supervisors from 1 January 2014. The consultation papers cover governance, a forward-looking assessment by insurers of their own risks (based on the ORSA principles), internal model pre-application process and submission of information to national competent authorities
Commenting on the release, Peter Ott, Head of Solvency II at KPMG said: “Whilst the areas covered by today’s release had already been highlighted by EIOPA in its December Opinion regarding interim measures, the surprise for many will be the depth of reporting proposed. There had already been significant push back from industry that pillar 3 reporting made little sense without the detailed valuation requirements of pillar 1 being finalised.”
Janine Hawes, insurance director at KPMG, explained that proposed level of reporting is more extensive than many had expected. “It is not restricted solely to narrative information, but includes a significant proportion of the quantitative reporting templates (QRT) that would apply once Solvency II comes into force. Most of the insurance industry will be affected, with EIOPA proposing that the annual templates are provided to local regulators by 80% of the local insurance market and the quarterly templates by 50%.”
“For the UK insurance market, this could be especially burdensome, with EIOPA confirming that this interim reporting would apply in addition to any existing reporting obligations. The first submission would be the annual return for the year ended 31 December 2014, which it proposes be submitted within 20 weeks of the year-end (26 weeks for group information). Unless the FSA removes its existing FSA Returns, this will result in UK insurers having to work on both the FSA Returns and this interim submission in parallel.
“This will represent a significant administration burden on insurance firms/groups. Given the delays to Solvency II timetable, many companies had reduced the level of Solvency II preparation, with pillar 3 reporting deferred by many insurance groups. These proposals will mean that they now need to reinvigorate their pillar 3 projects.”
Notes to editors
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