Solvency II

EC Seeks Guidance on Sustainable Finance

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The European Commission (“EC“) published an open letter to EIOPA and ESMA on August 1, 2018. The letter sought technical advice in relation to sustainable finance, in particular technical advice relating to legislation.

The letter, the full version of which is available here, outlines that the European Commission adopted a package of measures on sustainable finance on May 24, 2018, however they are seeking advice in relation to the possible amendment of legislation such as UCITS, MiFID II and Solvency II.

The aim of the letter, and the possible changes proposed therein, is to incorporate sustainability risks in the decisions taken and processes applied by financial market participants.

The letter asks that EIOPA and ESMA provide their insight by April 30, 2019.

European Commission Implementing Regulation on Information for Calculation of Technical Provisions and Basic Own Funds for Q3 2016 Reporting under Solvency II Enters into Force

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On August 18, 2016, the European Commission Implementing Regulation (EU) 2016/1376 laying down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from June 30 until September 26, 2016 in accordance with the Solvency II Directive was published in the Official Journal of the EU following its adoption by the European Commission on 8 August.  The Implementing Regulation entered into force on August 19, 2016 (the day after publication in the Official Journal) and applies from June 30, 2016.

The purpose of the Implementing Regulation is to ensure uniform conditions for the calculation of technical provisions and basic own funds by insurance and reinsurance undertakings for the purposes of the Solvency II Directive by laying down technical information on relevant risk-free interest rate term structures, fundamental spreads for the calculation of the matching adjustment and volatility adjustments for every reference date.

Under the Implementing Regulation, insurance and reinsurance undertakings shall use the technical information provided in the annexures to the Implementing Regulation when calculating technical provisions and basic own funds for reporting with reference dates from June 30 until September 29, 2016.

European Commission Adopts Implementing Regulation on Risk-Free Rate under Solvency II

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The European Commission has adopted an Implementing Regulation on the risk-free rate under the Solvency II Directive (2009/138/EC). The Implementing Regulation sets out technical information to be used by insurers when calculating technical provisions and basic own funds for reporting with reference dates from March 31 until June 29, 2016. Insurers should use the technical information, which is based on market data related to the end of the last month preceding the first reporting reference date to which the Implementing Regulation applies. EIOPA provided the Commission with the technical information relating to end March 2016 market data in April 2016. That information was published on April 7, 2016 in accordance with Article 77e(1) of Solvency II.

The Implementing Regulation will enter into force on the day after it is published in the Official Journal of the EU (OJ) and shall apply from March 31, 2016.

European Parliament to Consider Solvency II Amending Directive at Plenary Session

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On 7 June 2012, the European Parliament updated its procedure file on the proposed Directive amending the transposition and application dates for the Solvency II Directive (2009/138/EC). The procedure file indicates that the Parliament will consider the proposed Directive during its plenary session on 3 July 2012. Procedure File.

The European Commission published its legislative proposal for this Directive in May 2012. Legislative Proposal.

FSA Publishes Consolidated Policy Statement Setting Out the Regulatory Fees and Levies for 2012/13

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On 29 May 2012, the FSA published its consolidated policy statement, which provides an overview of the FSA’s fee-raising arrangements and sets out the regulatory fees and levies for 2012/13. Consolidated Policy Statement: PS12/11.

Highlights include:

– The FSA’s annual funding requirement (AFR) of £559.8 million is 3.2% lower than the estimate consulted on in CP12/3.

– The final Solvency II special project fee (SPF) rates recovery for 2012/13 is £15 million, compared with the £25.9 million estimated in CP12/3.

– The minimum fee for authorised firms will remain at £1,000 for the third year running.