The European Insurance and Occupational Pensions Authority (EIOPA) has recently published a report summarising the findings of an Expert Group set up in May 2011 with the aim of establishing good disclosure and selling practices for variable annuities.
The main findings of the Report are that good practices:
In relation to disclosures:
- should provide general information on the insurance undertaking and the legal and supervisory regime it operates under to take account of the cross-border nature of this business; and
- should also include product specific information to address product complexity.
In relation to selling practices:
- should ensure that variable annuities are always sold on an advised basis, even when they are sold directly by the company; and
- should focus on the customer's objectives to determine his demands and needs.
Please click here to read the full text of the Report.
EIOPA Opinion on External Models/Data used for the Calculation of Solvency II Capital Requirements
EIOPA has published an Opinion on External Models/Data used for the calculation of Solvency II capital requirements. The Opinion states that the national supervisory authorities (NSAs) may request any additional information from insurance companies using external models/data in order to assess whether these companies comply with Solvency II requirements for capital. NSAs will be obliged to reject an internal model application in circumstances where the insurer fails to provide sufficient information for an appropriate assessment of its application.
Please click here to read the full text of the Opinion.
EIOPA Final Report on Public Consultation No. 11/008 on the Proposal for Guidelines on Own Risk and Solvency Assessment
EIOPA has published its Final Report on the outcome of the Public Consultation No. 11/008, which was launched by EIOPA on 7 November 2011 on the proposal for Guidelines on Own Risk and Solvency Assessment (ORSA).
The Report underlines the purposes of the ORSA and provides additional details on how the ORSA is to be interpreted. Undertakings are expected to have the necessary competence and expertise to find fit-for-purpose solutions for the practical implementation of the ORSA. EIOPA points out that one key feature of the ORSA is proportionality.
Please click here to read the full text of the Report.
EIOPA Stress Test
It is widely expected that EIOPA will undertake an industry wide stress test later this year. It is likely to take place within a short timeframe, approximately six weeks, and will be administered through the Central Bank of Ireland.
Further information on this is expected soon.
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