International Association of Insurance Supervisors
COVID-19 - IAIS publishes request for feedback on its impact on the insurance sector - 24 July 2020
The International Association of Insurance Supervisors (IAIS) has published a consultation requesting feedback on the impact of COVID-19 on the insurance sector.
In particular, the IAIS seeks feedback on: (i) how COVID-19 will affect the financial system and the insurance sector over the short, medium and longer term; (ii) the key trends, risks and opportunities for the insurance sector in the light of COVID-19; and (iii) insurers’ expected main areas of focus over the next one to two years.
The consultation period closes on 28 August 2020.
IAIS consultation requesting feedback on the impact of COVID-19 on the insurance sector
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European Insurance and Occupational Pensions Authority
COVID-19 - EIOPA publishes statement on supervisory reporting under Solvency II - 27 July 2020
The European Insurance and Occupational Pensions Authority (EIOPA) has published a statement on insurance and reinsurance undertakings’ supervisory reporting obligations under the Solvency II Directive (2009/138/EC) in light of COVID-19. This follows EIOPA’s recommendations, published in March 2020, permitting insurers flexibility regarding supervisory reporting and public disclosure deadlines following the pandemic.
The statement explains that insurance and reinsurance undertakings should now start to comply with the supervisory reporting deadlines provided under the Solvency II framework, including that:
- insurance and reinsurance undertakings are expected to report a calculation (if it is available as of the reference date), or an estimate, of the solvency capital requirement (SCR) at the end of each quarter reference date instead of the last calculated one. The Solvency II quarterly own funds template with a reference date between 30 June and 31 December 2020 should be used; and
- national competent authorities are requested to submit information received quarterly to EIOPA no later than two weeks upon receipt.
EIOPA statement on supervisory reporting under Solvency II in light of COVID-19
Prudential Regulation Authority
PRA Consultation Paper CP11/20 - Solvency II: The PRA’s expectations for the work of external auditors on the matching adjustment - July 2020
The PRA has published a Consultation Paper (CP11/20) setting out its proposed expectations and guidance relating to auditors’ work on the matching adjustment (MA) under the Solvency II. The PRA also proposes several new expectations relating to communications by auditors on the subject of the MA. The proposed guidance and expectations aim to clarify the current requirements for auditors in relation to the MA, increase transparency on the respective roles of auditors and the PRA, and clarify the scope of the PRA’s approval of the MA.
The proposed guidance and expectations would amend Supervisory Statement (SS) 11/16 ‘Solvency II: External audit of, and responsibilities of the governing body in relation to, the public disclosure requirement’.
The consultation period closes on 30 October 2020. If approved, the PRA proposes that the draft amendments to SS11/16 would take effect from Thursday 31 December 2020.
PRA Consultation Paper CP11/20 – Solvency II: The PRA’s expectations for the work of external auditors on the matching adjustment
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Financial Conduct Authority
COVID-19 - FCA publishes update on its High Court BI insurance test case - 30 July 2020
The FCA has updated its webpage on the progress of its High Court test case, which seeks a declaratory judgment about the meaning and effect of the wording of certain business interruption (BI) insurance policies in light of COVID-19.
The FCA has published draft transcripts of the third, fourth, fifth and sixth days of the trial. The FCA has also published a document containing agreed facts between the parties regarding the prevalence of COVID-19 in the UK. The eight-day hearing ended on 30 July 2020.
FCA webpage on its High Court test case on the validity of BI insurance claims in light of COVID-19
COVID-19 - FCA publishes draft updated guidance for insurance and premium finance firms - 24 July 2020
The FCA has published for consultation draft updated guidance for insurance and premium finance firms when dealing with customers experiencing temporary financial difficulties as a result of COVID-19. This follows the FCA’s initial guidance for such firms, which was published in May 2020.
The FCA proposes to extend its initial guidance, which sets out the actions firms should take when they identify a customer in financial difficulties associated with COVID-19, for a further three months until 31 October 2020. The FCA also seeks views on: (i) its expectations on how firms should treat customers still in financial difficulty at the end of a payment deferral; (ii) whether aspects of the guidance could be retained to apply on a permanent basis; and (iii) its guidance on product value and COVID-19 for insurance firms, which was published in June 2020, to inform an upcoming review.
The consultation period closes on 28 July 2020. If confirmed, the FCA aims for the updated guidance to come into force by 18 August 2020.
FCA draft updated guidance for insurance and premium finance firms in light of COVID-19
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