Recent regulatory developments of interest to financial institutions.
Contents
- COVID-19: PRA statement on regulatory reporting amendments
- COVID-19: EIOPA recommendations on flexibility for supervisory reporting and public disclosure deadlines
- Solvency II: Delegated Regulation correcting Solvency II Delegated Regulation on look-through approach and risk weights for flood risk
- COVID-19: IAIS update
COVID-19: PRA statement on regulatory reporting amendments
On 23 March 2020, the Prudential Regulation Authority (PRA) published a statement on COVID-19 regulatory reporting amendments for UK insurers. The PRA outlines its approach to regulatory reporting for UK insurers in response to COVID-19 and the European Insurance and Occupational Pensions Authority's (EIOPA's) statement of 20 March 2020 on COVID-19 reporting and public disclosures recommendations (see below).
In the statement, the PRA sets out (in table format) the specific delays to aspects of regulatory reporting that it will accept. It is accepting delays relating to both harmonised reporting under the Solvency II Directive and its own, PRA-owned, reporting. The delays relate to annual reporting for the 31 December 2019 year-end, or a year-end after that date but before 1 April 2020.
The PRA explains that firms are able to submit anytime from the original submission date up to the end of the extended deadline window as per the tables in the statement. Where reporting submissions are comparatively well-progressed, it encourages firms to submit them earlier in the windows, to the extent this is possible.
Firms are reminded to note the technical Annex within the EIOPA recommendation document and, in particular, that any subsequent submissions shall include all previously submitted templates for that period to avoid submissions being overwritten. Corresponding external audit deadlines are also extended to accommodate the accepted delays.
COVID-19: EIOPA recommendations on flexibility for supervisory reporting and public disclosure deadlines
On 20 March 2020, EIOPA has published recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure by insurers, in the light of COVID-19.
The aim of the recommendations is to foster convergence and consistent supervisory approaches across member states when providing flexibility for supervisory reporting and public disclosure of insurance and reinsurance undertakings. EIOPA considers that undertakings need to concentrate their efforts on monitoring and assessing the impact of the COVID-19 situation as well as ensuring business continuity and comments that, in this context, the Q1-2020 submission of information to competent authorities will be extremely important for undertakings and competent authorities.
In the recommendations, EIOPA specifies degrees of flexibility that competent authorities should permit to undertakings in respect of the following reporting and disclosure requirements relating to the Solvency II Directive.
Solvency II: Delegated Regulation correcting Solvency II Delegated Regulation on look-through approach and risk weights for flood risk
Commission Delegated Regulation (EU) 2020/442, which corrects the Solvency II Delegated Regulation ((EU) 2015/35), was published in the Official Journal of the EU (OJ).
The new Delegated Regulation makes corrections relating to the look-through approach and risk weights for flood risk, which are necessary due to previous amendments made by Delegated Regulation (EU) 2019/981. The new Delegated Regulation comes into force on 15 April 2020. It applies retroactively from 8 July 2019 (the entry into force date of Delegated Regulation (EU) 2019/981).
COVID-19: IAIS update
On 27 March 2020, the International Association of Insurance Supervisors (IAIS) published a press release on the steps it is taking to address the impact of COVID-19 on the insurance sector.
Among other things, the IAIS explains that it is making the following adjustments to its work programme to provide operational relief to supervisors and insurers:
- eveloped for forward-looking risk assessment to undertake a targeted assessment of the impact of COVID-19 on the global insurance sector;
- in consultation with the Financial Stability Board (FSB), the IAIS will review the 2020 timelines for the implementation of the holistic framework for the mitigation of systemic risk in the global insurance sector;
- it will review and adjust its timelines for collecting data for insurance capital standard (ISC) reporting and the aggregation method (AM). The deadline for submitting data has been extended to 31 October 2020. The planned July 2020 consultation on the development of high-level principles to inform the development of criteria to assess whether the AM provides comparable outcomes to the ICS will also be adjusted; and
- it will postpone the development of supporting material, with public consultations generally deferred by at least six months.
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