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Which aspects of Solvency II do you plan on reviewing?
First of all, right now we are working on the first phase of the Solvency II review which is focused on the review of the Solvency II capital requirements. The European Commission asked us to review a list of elements and we want to simplify the models and increase proportionality. We will publish our advice to the European Commission. In a second phase, we are working on the calibration of certain risks, such as longevity, mortality, or catastrophic risks. The first calibration was made from 2008 to 2010, but we have better data now and adjustments need to be made.
Another part of the review is made annually, on the implementation and consequences of long-term guarantees measures. The reports EIOPA is producing will be a basis for a more complete review of the regime, for which we will give our advice in 2020 to the European Commission who will proceed with the review in 2021.
How do you respond to the criticism about your stress tests on insurers, that the scenarios were unlikely and that the results were anonymous?
The stress tests are tools to look at vulnerability in an extreme but plausible scenario. We want to look beyond what is the capital regime in Solvency II, which already has some stresses. The tests are not made to second-guess about capital requirements. In that sense, our stress tests are different from those of the banking sector, which were made to repair existing vulnerabilities.
On the disclosure aspect, I want to underline that for every stress test, we published more information than in the previous one. In 2016, we didn’t want to publish any individual results because Solvency II was not there yet and we wanted insurers to publish their numbers on Solvency II first, which happened this year. For the next publication in 2018, we are exploring the possibility to publish individual results. We will probably also cover non-life insurers, as we did in 2014, and we hope to include some qualitative elements on cyber risks.
How is advancing the creation of a pan-European pension product (PEPP)?
We started working on the subject in 2012 after a call for advice from the Commissioner Michel Barnier. We gave our final advice to the European Commission in 2016 and they took a good part of it. They put forward a proposal in June so the concrete regulation is being discussed as we speak. We hope a political agreement can be found in the coming months.
What is your approach to Insurtech?
With digitalisation, there is an opportunity to have better services and products but at the same time there are risks concerning the ethical use of data, the potential discrimination and exclusion from products, and cyber risks. We started having round tables last year with insurers, startups, consumers, national regulators, to first understand what was is happening on the market. Now, this is one of our strategic priorities because it will be a fundamental area going forward. We want to be technologically neutral, and we want to make sure innovation delivers better outcomes. Now we are in a position to set a plan.