Financial Services Regulation and Compliance - Insurance March 2024

Domestic

CBI Insurance Quarterly - March 2024

On 26 March 2024, the Central Bank of Ireland (the CBI) published the latest issue of its Insurance Quarterly Newsletter for Q1, 2024. The newsletter addresses several important topics including the CBI’s recent review of motor insurance pricing and claims practices and the implementation of Solvency II Taxonomy 2.8.0 on 31 December 2024.

The newsletter provides a valuable synopsis of major domestic regulatory developments of the quarter, including the CBI’s Consultation Paper on the revision of the Consumer Protection Code (the CPC) on 7 March 2024, the publication of the CBI’s Regulatory Risk Report 2024 on 29 February 2024 and the CBI’s Demographic Analysis Report on 1 March 2024.

The newsletter also addresses publications from EIOPA in the quarter, including its staff paper on barriers to purchasing natural catastrophe insurance on 29 February 2024, its Consumer Trends Report 2023 on 23 January 2024 and its Strategic Supervisory Priorities for the period of 2024-2026 on 11 March 2024.

Key deadlines that the CBI wished to draw insurers’ attention to include the 7 April 2024 deadline for Solvency II returns, the deadline for responses to the CPC review on 7 June 2024, and the publication of the next Insurance Quarterly Newsletter on 20 June 2024.

CBI publishes Insurance Corporations Statistics - Q4 2023

The CBI released its Insurance Corporation Statistics for Q4 2023 on 21 March 2024. These statistics are based off the balance sheet data provided by Irish insurance corporations (ICs), which includes companies directly providing insurance or reinsurance. Key statistics to note include:

  • total assets held by ICs increased by 0.3% during Q4 2023 and now stand at €414bn (6% higher than Q4 2022)
  • non-unit linked life insurance technical reserves (ITRs) increased by 14.4% and non-life ITRs decreased by 15.4% during Q4 2023. Overall, ITRs held by ICs are 8% higher than as recorded at Q4 2022
  • holdings of investment fund shares decreased by 4.5% during Q4 2023

European

EIOPA: Supervisory Priorities for period of 2024-2026

The European Insurance and Occupational Pensions Authority (EIOPA) published its strategic supervisory priorities for 2024 to 2026 on 11 March 2024. EIOPA’s two overarching strategic objectives for the period are financial robustness of insurance undertakings and consumer protection in a disruptive environment. The publication identifies EIOPA’s specific annual supervisory priorities for 2024 as:

  • continuous monitoring of the impact of the macroeconomic environment
  • risks transfers including the capacity and appropriateness of risk transfers
  • value for money including in relation to inflation and current macro-economic trends

EIOPA survey on taxonomy implementation starting dates

A survey seeking feedback on the challenges posed to stakeholders by changing the start-date of the EIOPA supervisory reporting taxonomy from Q4 to 1 January the following year was launched by EIOPA on 25 March 2024. The survey follows several years of EIOPA receiving conflicting views from stakeholders as to the utility of launching a new taxonomy in Q4. EIOPA underlines that it has not yet made a definitive decision on any changes in approach but any updates to the current regime would have effect from taxonomy version 2.10.0 onwards. The deadline to respond to the survey is 14 July 2024.

EIOPA speech - Insurance and Pensions Supervision for a More Resilient Society

EIOPA Chairperson, Petra Hielkema, delivered a speech at the CRO Forum in Venice on 21 March 2024. Ms Hielkema’s speech focused on challenges within the insurance industry, and opportunities for the insurance industry to raise consumer awareness and empower informed decision-making to provide solutions for the following potential systemic risks:

  • Natural Catastrophe Protection Gap (NatCat). Ms Hielkema noted that NatCat losses in the EU are estimated at over €650bn since 1980, with approximately 75% being uninsured. She noted that such losses will only grow in scale and outlined EIOPA’s proposed pillars which include catastrophe bonds and public-private partnerships to provide a solution to the crisis.
  • Pension gaps. Ms Hielkema noted that the aging population of Europe is leading to the growth of pension gaps with every fifth senior citizen in the EU now at risk of poverty or social exclusion.
  • Cross Border Business. Ms Hielkema outlined the work EIOPA is doing to ensure supervisory convergence across EU member states, with a particular focus on internal models.
  • Digital Transformation and AI. Ms Hielkema said that EIOPA is analysing what is needed on its part to supervise insurers’ use of AI technologies in a convergent way.

EIOPA issues statement on the gender gap in the insurance sector

On 26 March 2024, EIOPA Chairperson, Petra Hielkema issued a blog post on bridging the gender gap in the insurance and pensions sectors within the European Union. Ms. Hielkema’s noted the obstacles that women face in accessing insurance products and services with 62% of female consumers in the European Union feeling unfairly targeted by exclusions in insurance contracts. Looking ahead, Ms. Hielkema emphasised the need to overcome discriminatory practices in the insurance industry, particularly regarding pricing and coverage and ensuring that insurance products are fair and equitable for all consumers, regardless of gender. 

EIOPA publishes monthly technical information for Solvency II

EIOPA published, on 5 March 2024, its monthly technical information regarding the relevant risk-free interest rate term structures (RFR) with reference to the end of February 2024, for Solvency II purposes. This technical information is used for the calculation of technical provisions for (re)insurance obligations. On the same date, EIOPA also published technical information on the symmetric adjustment of the equity capital charge under Solvency II with reference to the end of February 2024.

On 27 March 2024, EIOPA also published the ultimate forward rate (UFR) for 2025. For the euro, the applicable UFR remains unchanged at 3.30%.

For more information on these topics please contact any member of A&L Goodbody's Insurance & Reinsurance team.

Date published: 22 April 2024