IRSG published its 2013-2016 Activity Report

12 September 2016 — Alexandru CIUNCAN, Adina TUDOR
EIOPA Insurance and Reinsurance Stakeholder Group (IRSG) published its activity report for the September 2013 - March 2016 period. The Group serves an important role for EIOPA by providing input on consultations and own initiative work based on the collective views of its wide-ranging members.

"The IRSG has been very active during its mandate, responding to numerous consultations launched by EIOPA, particularly on issues concerning Solvency II, in addition to market conduct issues and own initiative work. I would like to thank all members of the IRSG for their active contribution", Karel Van HULLE, Chair of the IRSG, declared.

"This stakeholder group has helped to deliver Solvency II, a project that fundamentally changes insurance regulation within the EAA. One of the key challenges for the next stakeholder group will be to assist EIOPA in ensuring that this regulatory change will ultimately deliver the intended benefits and avoid unintended consequences in the interest of all stakeholders", Karel Van HULLE added.

Given the role of IRSG to help facilitate EIOPA's consultation with stakeholders and the very significant number and size of consultations during the term of the IRSG, most of the work undertaken related to EIOPA's own work programme, but there were also a number of own initiative work streams.

From 2013 to 2016 the IRSG published 40 opinions and papers. These included:

1. Response to public consultations and requests for input from EIOPA:

a. Solvency II, Pillars 1, 2 and 3: As part of the implementation of the Solvency II framework and to help achieve harmonization across Europe, EIOPA issued a series of important public consultations on draft Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS) and guidelines in 2014. The IRSG was extensively involved in responding to these consultations over the course of its mandate.

b. Infrastructure investments: One of the initiatives launched in 2014 by the newly established European Commission, chaired by Jean-Claude JUNCKER, was the announcement of an investment plan aimed at driving growth in the European economy, which included the removal of regulatory barriers that might be holding back private investment. As part of this initiative, the European Commission asked EIOPA's advice on how to define infrastructure as an asset class and how to define the calibration for this new asset class under Solvency II. The IRSG responded to the related consultation issued by EIOPA on the identification and calibration of infrastructure investment risk categories in Solvency II.

c. European Market Infrastructure Regulation (EMIR): This initiative was launched as a result of a G-20 agreement following the financial crisis. As well as introducing further reporting and collateral requirements, the aim is to move over - the - counter (OTC) derivatives to being centrally cleared through a central counterparty (CCP). The IRSG responded to two consultation papers issued by the Joint Committee of the ESAs on a draft RTS on risk-mitigation techniques for OTC derivatives not cleared by a CCP under the EMIR regulation. Given the importance of derivatives to the insurance and pension industry for risk mitigation, the IRSG responded jointly with the OPSG to the first consultation paper on the topic in July 2014.

d. Financial Conglomerates: In October 2014, the IRSG responded to a public consultation issued by the Joint Committee of the ESAs on its RTS on risk concentration and intra-group transactions under the Financial Conglomerates Directive (FICOD).

e. ESFS Review: Following the publication of the European Commission's European System of Financial Supervision (ESFS) review in August 2014, the IRSG held internal discussions and exchanged views on how to make the IRSG effective as a challenging body and improving contacts with stakeholders including the EU institutions. Its position was coordinated with that of the OPSG.

f. Pan - European Personal Pension Product (PEPP): In the context of the new European Commission's goal to spur growth and investment in the EU economy, it is envisaged that the establishment of a single market for personal pension products would encourage capital to be allocated towards long-term investments. EIOPA launched a consultation on the creation of a PEPP in July 2015, which the IRSG responded to in October 2015.

g. Market conduct: Market conduct was a standing item on the agenda of the IRSG meetings throughout its term. The IRSG developed opinions, feedback statements and responses to consultations on several market conduct/consumer protection related topics, including Key Information Documents (KID) for Packaged Retail and Insurance - based Investment Products (PRIIPs), cross-selling practices, conflicts of interest in sales of insurance based investment products, product oversight and governance, product intervention powers, KID for non-life (motor) insurance products, in addition to EIOPA's questionnaires on consumer trends and mobile phone insurance.

2. Own initiative work:

a. International developments: As part of the development of a global capital standard and in order to address systemic risk, the International Association of Insurance Supervisors (IAIS) issued three important consultations during 2014 and 2015, which the IRSG responded to. These consultations related to the Basic Capital Requirement (BCR) for calculating the capital add-ons for global systemically important insurers (G-SIIs), Higher Loss Absorbency (HLA) for G-SIIs and the Insurance Capital Standard (ICS) applicable to internationally active insurance groups (IAIGs).

b. Feedback statements and papers were produced by individual members on the following issues:
  • Savings, investment products and Guaranteed Savings Products (GSP). Their boundaries, regulations and communication to the public
  • Compulsory vs Optional Disaster Insurance
  • Cyber risk
  • Catastrophe models and Solvency II: Transparency, evaluation, credibility
The complete report can be read here.

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