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With its Guidelines, EIOPA intends to significantly increase preparedness of both supervisors and insurers for Solvency II once the new framework is applicable. The Guidelines aim to ensure that National Competent Authorities (NCAs), insurance companies and groups take active steps towards implementing certain key elements of Solvency II in a consistent and convergent way. It is up to NCAs to decide how best to incorporate the Guidelines into their national regulatory or supervisory framework.
The Guidelines foresee a gradual application through “phasing-in” provisions (i.e. different expectations for 2014 and 2015).
EIOPA's Guidelines cover a number of key areas of Solvency II: system of governance, including risk management; forward looking assessment of the undertaking’s own risk (based on the Own Risk and Solvency Assessment (ORSA) principles); submission of information to NCAs; pre-application for internal models.
EIOPA envisages issuing the Guidelines in all the official EU languages on 31 October 2013 with the application date of 1 January, 2014. The NCAs will report to EIOPA about their compliance or intention to comply within two months after the Guidelines’ issuance. The NCAs are required to submit a progress report to EIOPA on the Guidelines’ implementation in February 2015.
Gabriel Bernardino, Chairman of EIOPA, said: “I would like to thank all the stakeholders for their valuable input during the public consultation. Their comments and suggestions helped us to refine the content and achieve a better balanced approach to the preparatory phase. Together we have made a decisive step towards Solvency II!
"The move towards a risk-based supervisory system like Solvency II presents a number of important challenges to undertakings and supervisors. These Guidelines are a key step in order to ensure that preparation will be done in a consistent manner for the benefit of the internal market, industry and consumers”.
Links to Guidelines/consultation
Guidelines in all official languages
Background information, 2.10.13
Initial response from Insurance Europe - Consistency is key in Solvency II implementation, 1.10.13