In 2020 the European Commission launched a review of the Solvency II Directive in line with its legal mandate.
The review comes after a technical review of the Level 2 measures under Solvency II.
As a step in the process of this review, the European Commission set EIOPA (European Insurance and Occupational Pensions Authority) as the European industry supervisor to task on providing technical advice that will feed into the Commission’s review. Based on current timetables, it is understood the European Commission will present the findings of its review and an update to the legislation in Q3 of this year.
What’s at stake for FERMA?
FERMA’s major preoccupation in the Solvency II review is the Principle of Proportionality.
FERMA has developed a proposal for a harmonised approach in the application of the proportionality principle by the supervisors. FERMA’s conceptual approach has been introduced in its “Response to the EIOPA Consultation Paper on reporting and disclosure in the context of the Solvency II revision”, dated 18th October 2019, and is aimed at outlining a methodology to assess the overall risk profile of any given (re)insurance undertaking and subsequently ensure that proportionality is applied by EU national supervisors in a harmonized way.
FERMA believes its suggested harmonised approach would allow national supervisory authorities to appropriately screen any insurance undertakings’ nature, scale and complexity against the core objectives of Solvency II, which are policyholder protection, market discipline and financial stability.
FERMA’s Captives Committee will meet with EIOPA on 11 March.