European Insurance and Occupational Pensions Authority
COVID-19 and Business Insurance cover – EIOPA paper on insurability – 12 February 2021
The European Insurance and Occupational Pensions Authority (EIOPA) has published a staff paper on measures to improve the insurability of business interruption arising from pandemics. The paper suggests a number of improvements, including prevention measures to reduce losses; capital markets risk transfer and multi-peril solutions for systemic risk. The paper also addresses the general challenges related to modelling and triggers for claims in the context of pandemics.
It notes: “the challenges posed by the pandemic crisis require the sharing of costs and responsibilities across the relevant parts of the private and public sector in a meaningful manner, as well as some central coordination across public and private entities… Therefore, these measures have to be considered together with measures which individuals, businesses and governments should take, achieving a proper balance of incentives and respective responsibilities.”
The deadline for comments is 31 March 2021.
EIOPA Staff Paper
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Supervisory convergence plan for 2021 – published by EIOPA – 17 February 2021
EIOPA has published its supervisory convergence plan for 2021 with reference to a number of priority areas, These include, among others, new priority areas such as: the integration of environmental, social and governance risks into prudential and conduct supervision and analysing and identifying potential risks to the internal market following the identification of inconsistencies in the treatment of reinsurance undertakings with head offices located in third countries.
EIOPA will also continue working on common benchmarks for the supervision of internal models, supervisory assessments of conduct risks as well as on areas needing further development, for example the application of proportionality in Solvency II.
EIOPA supervisory convergence plan for 2021
Press release
Financial Conduct Authority
Business Interruption Test Case – FCA updates website with written submissions – 16 February 2021
The FCA has updated its webpage on the business interruption (BI) insurance test case with the written submissions made by the FCA and other parties to the Supreme Court on the form of declarations issued by the Court. These declarations will be the culmination of the judgments in the test case and will declare whether the policies in the representative sample potentially cover business interruption losses arising from the coronavirus (Covid-19) pandemic.
The Court handed down the judgment on 15 January 2021. The FCA notes that it expects that the Supreme Court will issue the declarations without a further hearing, but it does not know when. It also comments that it believes that the judgment from the Supreme Court gives insurers the clarity they need to conclude their claims processes with the large majority of their BI customers, without waiting for the declarations.
Updated webpage
FCA Submissions
Please see the General section for an item on an FCA consultation on the extension of guidance relating to cancellations and refunds.
Please see the Banking and Finance section for an item on a letter sent by the PRA relating to current and horizon risk issues for independent NEDs from both banks and insurers.
