EIOPA publishes discussion paper on Solvency II delegated regulation

The European Insurance and Occupational Pensions Authority (EIOPA) has published a Discussion Paper on the ‘Review of Specific Items’ in the Solvency II Delegated Regulation focusing on the Solvency Capital Requirement (SCR) standard formula.

The Discussion Paper is EIOPA’s first step in the preparation of its response to the Call for Advice received from the European Commission in July 2016. With this consultation EIOPA starts the process of the post-evaluation of Solvency II as foreseen in the Directive and its Delegated Acts.

The body said that the objectives of this review process in the context of the SCR standard formula are to ensure a proportionate and technically robust, risk-sensitive and consistent supervisory regime for insurance sector and to propose possible simplifications.

EIOPA said it is consulting on overarching aspects of the SCR standard formula and solicit stakeholder feedback on key sub-modules such as life and non-life underwriting risks, catastrophe risks, counterparty default risk, risk margins, own funds outlined in details in the Discussion Paper.

It also stressed that at this stage the Discussion Paper does not propose policy options, which will be addressed during roundtable discussions with relevant stakeholders organised in the course of 2017. The Final Advice will be submitted to the European Commission by February 2018.

Gabriel Bernardino, chairman of EIOPA, said: “The review of the SCR standard formula marks the first phase of the Solvency II review process. Therefore, we call upon all stakeholders to share with us evidence-based information and necessary, justified changes. EIOPA is particularly interested in concrete proposals to achieve the objective of more simplicity and proportionality whilst reflecting risk-sensitivity of the system and avoiding pro-cyclicality.”