Financial Services Regulation and Compliance - Insurance August 2022
Domestic
CBI consults on proposed guidance for (re)insurance undertakings on climate change risk
On 3 August 2022, the Central Bank of Ireland (CBI) published its Consultation Paper on proposed Guidance for (Re)Insurance Undertakings on Climate Change (the Guidance). As detailed in our previous commentary, the proposed Guidance aims to clarify the CBI’s expectations of (re)insurers in relation to how they address climate change risk, and to help (re)insurers to develop their governance and risk-management frameworks in order to achieve this. Submissions are invited on the Guidance by 26 October 2022.
CBI guidance note – outsourcing register template – market firms or regulated financial service providers and (re)insurance undertakings
The CBI recently published its outsourcing register template and a Guidance Note (the Guidance) on the completion of outsourcing registers by (re)insurers. As required under the CBI's Cross Industry Guidance on Outsourcing, (re)insurers are expected to establish and maintain an outsourcing register. Any (re)insurer with a PRISM rating of Medium Low or above will be required to submit their completed outsourcing register to the CBI on an annual basis, with the first registers to be submitted by 7 October 2022.
Personal Injuries Resolution Board Bill 2022
On 2 August 2022, the Department of Enterprise, Trade and Employment published the Personal Injuries Resolution Bill 2022 (the Bill). The Bill increases the capacity of the Personal Injury Board (the Board) for resolving claims without recourse to litigation by amending the Personal Injuries Assessment Board Act 2003-2019 (the Act) to expand the Board's statutory functions. It also provided for the Board is to be renamed the Personal Injuries Resolution Board (PIRB).
European
Technical information for calculation of technical provisions and basic own funds under Solvency II published in Official Journal
On 8 August 2022, the European Commission published its Commission Implementing Regulation (the CIR) setting out technical information for the calculation of technical provisions and basic own funds for reporting. The CIR, which entered into force on 10 August 2022, contains information on the calculation of the best estimate (in accordance with Article 77 of Solvency II), the matching adjustment (Article 77c of Solvency II) and the volatility adjustment (Article 77d of Solvency II) to achieve uniformity of calculations. The CIR was published with reference dates for reporting from 30 June 2022 until 29 September 2022.
EIOPA publishes monthly technical information for Solvency II risk-free interest rate term structures and the equity capital charge
On 3 August 2022, EIOPA published monthly technical information on the relevant risk free interest rate term structures with reference to the end of July 2022. This technical information is used for the calculation of technical provisions for (re)insurance obligations. Upcoming publication dates in 2022 are set as: 5 September, 6 October, 7 November and 5 December.
EIOPA also published the technical information on the symmetric adjustment of the equity capital charge for Solvency II with reference to the end of July 2022.
EIOPA publishes application guidance on climate change materiality assessments and climate change scenarios in ORSA
The European Insurance and Occupational Pensions Authority (EIOPA) published the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA) on 2 August 2022. The application guidance follows a public consultation on the topic as well as a pilot exercise in which stakeholders were invited to participate. The application guidance gives insights into where (re)insurers have the possibility to address climate change risks in the ORSA and uses mock non-life and life companies to produce concrete examples in order to help (re)insurers design the steps for the materiality assessment and run climate change scenarios. EIOPA notes that the guidance is intended to be an aid to undertakings and that undertakings may wish to explore other alternatives to examine climate change risks.
Consultation paper on Supervisory Statement on the use of governance arrangements in third countries to perform functions or activities
EIOPA published a consultation paper on 1 August 2022 seeking feedback on a draft supervisory relating to governance arrangements in third countries. The aim of the draft supervisory statement is to enhance the supervision and monitoring of insurance undertakings’ and intermediaries’ compliance with relevant EU legislation concerning governance arrangements in third countries.
A key point EIOPA is concerned with is in relation to governance arrangements where undertakings or intermediaries use a branch to conduct certain regulated functions and activities which ultimately serve policyholders in EEA. Stakeholders are invited to respond to the consultation paper by 31 October 2022.
Submissions are invited on the proposed guidance by 31 October 2022.
Sanctions imposed in response to the crisis in the Ukraine
Since February, the EU imposed a number of sanctions in response to the crisis in the Ukraine. Given that the crisis is developing and sanctions are continuing to evolve, the CBI is publishing details of new restrictive measures/sanctions that are adopted in this regard, as well as any associated EU/UN guidance, on their dedicated webpage.
For more information on these topics please contact any member of A&L Goodbody's Insurance & Reinsurance team.
Date published: 14 September 2022