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Insurance Europe remains supportive of interim measures that aim to encourage undertakings to prepare for Solvency II.
In particular, it recognises the benefits of undertakings embedding the Solvency II principles of risk management into their governance structure and to gain practical experience with the upcoming forward looking risk assessment. It also supports the issuing of the interim guidelines on pre-application of internal models aiming at assuring consistency in approach and timing across national competent authorities and readiness from undertakings.
Insurance Europe fears however that the direction taken by EIOPA has gone further, leading this preparatory phase beyond its objectives. As such, it would like to highlight the following aspects to EIOPA's attention for further consideration:
a) The Guidelines should focus on the undertaking’s level of preparedness and not on the early implementation of Solvency II.
b) The Interim Guidelines should be applied by the undertakings on a best effort basis.
c) Interim Guidelines should be high-level principle-based.
d) Interim Guidelines should not require at this stage the implementation of compulsory quantitative reporting or ORSA requirements based on Solvency II Pillar I requirements.
e) Any interim measures to be applied once the political process is finalised, should not require more than one cycle of annual reporting and one cycle of quarterly reporting before Solvency II entry into force.
f) Any interim measures to be applied once the political process is finalised, need to assure that undertakings will have enough time to establish the appropriate internal processes and IT systems.
g) Any interim measures to be applied once the political process is finalised, should exclude narrative reporting.
h) Any interim measures to be applied once the political process is finalised, should exclude Group reporting.
i) Interim Guidelines should not penalise undertakings on pre-application for Internal Models and more binding commitments should be requested from national competent authorities in regard the pre-application process.
j) The explanatory text creates uncertainty.
Lastly, and although referred in EIOPA’s Cover Note, Insurance Europe stresses that the interim measures should not drive any supervisory action during the preparatory phase.