Brian Morrissey, Head of Insurance, and our insurance team have compiled a collection of 乐鱼（Leyu）体育官网's latest publications and articles which focus on developments in, and issues facing the insurance industry. Also included are recent publications from the CBI, EIOPA, and other European bodies.
乐鱼（Leyu）体育官网 updates
Driving change through conduct risk
In today鈥檚 fast-paced landscape where Environmental, Social and Governance (鈥淓SG鈥�) considerations are shaping investor perceptions, corporate reputation and sustainable business practices, the focus on Conduct Risk has never been more intense.
Whilst navigating the landscape of ethical conduct is complex, there are profound implications for an organisation鈥檚 ESG performance if prompt action is not taken. The 乐鱼（Leyu）体育官网 team (led by Gillian Kelly, Head of Consulting and Patrick Farrell, Risk Consulting Partner) to manage and mitigate the drivers of poor conduct and culture.
Taking charge of financial advice
In an era of unprecedented public and regulatory scrutiny, the need to address how financial services organisations provide financial advice is as pressing as ever and, in many ways, now faces a period of even more heightened challenge. Globally, there is a recognition that more can be done within the wealth management industry in this regard, and this has been exacerbated by evolving regulation, tech-driven changes in how financial advice is sought and delivered, and heightened risks related to data, fraud and vulnerable customers. The 乐鱼（Leyu）体育官网 team (led by Shane Garahy, Risk Consulting Partner and Rosalind Norton, Risk Consulting Director)
Consumer reform
The New Consumer Agenda was published by the European Commission in November 2020 and provides a consolidated view for Consumer Policy within EU member states for the next five years, 2020 to 2025. Consumer protection is at the forefront of this Agenda and the Central Bank of Ireland鈥檚 priorities for 2021.
乐鱼（Leyu）体育官网 (led by Gillian Kelly) will be discussing a number of the key consumer related topics as part of our consumer reform series. We invite you to follow this series and contact us with any questions you may have.
Gaining Assurance Efficiencies
乐鱼（Leyu）体育官网 (led by Patrick Farrell) and the process to develop your own assurance map to gain assurance efficiencies, avoid duplication and help focus on critical risks. It is useful to conduct assurance mapping to gain awareness of the way in which they are receiving assurance in relation to key areas of operations and over significant risks. It also supports the ability for these stakeholders to direct assurance activities into areas of higher risk, whilst ensuring both appropriate coverage and efficiency in the broader assurance activities across the enterprise.
What makes an effective board?
How do boards maximise their effectiveness and what should they focus on? How can directors maximise their positive impact in an increasingly complex world? 乐鱼（Leyu）体育官网 (led by . With business becoming more demanding, the role and composition of boards has never been more relevant. This is especially the case for a wide range of stakeholders, including current and aspiring board members. It also has implications for the evolving requirements for successful board members.
Central Bank of Ireland updates
The long-term outlook for the Irish economy
On 30 January, the Central Bank delivered by Governor Gabriel Makhlouf. The opening part of the speech touched on the current developments in the Euro area economy with a focus on inflation and interest rates. The speech covered the following main topics:
- The Irish economy鈥檚 historic performance;
- The long-term outlook for the Irish economy, in particular the impact of transitions in demography, in climate and in technology, as well as the fragmentation of global trade; and
- Policy choices to support long-term growth in output and living standards.
Public Statement: Irish Financial Services Appeals Tribunal judgement
On February 14, the Central Bank in relation to its decision to refuse an individual鈥檚 application to a senior role (pre-approval controlled function (PCF)) in financial services under the Central Bank鈥檚 fitness and probity (F&P) regime. IFSAT found a number of issues in how the Central Bank handled this application. Accordingly, the Tribunal has returned the application to the Central Bank for reassessment. The Central Bank has commissioned an independent review of its fitness and probity vetting regime for individuals taking up important finance sector position.
Central Bank publishes Governor鈥檚 Financial Regulation priorities letter
On 29 February the Central Bank of Ireland published its (RSO) (PDF, 2.1MB) 鈥� the first of what will be an annual report setting out the Central Bank鈥檚 view on the key trends and risks facing the financial sector, as well as the regulatory and supervisory priorities and expectations it has set in the context of those risks, namely:
- Priority 1: Proactive risk management and consumer-centric leadership of firms.
- Priority 2: Firms are resilient to the challenging macro environment.
- Priority 3: Firms address operating framework deficiencies.
- Priority 4: Firms manage change effectively.
- Priority 5: Climate change and Net Zero transition are addressed.
- Priority 6: The Central Bank enhances how it regulates and supervises.
EIOPA updates
EIOPA: IORP Risk Dashboard
On 5 February, EIOPA . EIOPA鈥檚 IORP Risk Dashboard summarises the main risks and vulnerabilities in the IORPs sector of the European Economic Area for the different pension schemes i.e. Defined Benefit (DB) and Defined Contribution (DC) schemes. The dashboard includes a set of risk indicators covering traditional risk categories such as market and credit risk, liquidity risk, reserve and funding risks, as well as emerging threats like ESG and cyber risks.
ESAs: Monitoring of Big Techs鈥� financial services activities
On 1 February, the European Supervisory Authorities (ESAs) published a providing financial services in the EU. Based on the survey responses received from NCAs, BigTechs have established e-money institutions, payment institutions, credit institutions, insurance intermediaries and insurance undertakings in the EU. 26. The ESAs will continue to strengthen the monitoring of the relevance of BigTech in the EU financial services sector including via the establishment of a new monitoring matrix
Technical information on the symmetric adjustment
On 5 February, EIOPA on the symmetric adjustment of the equity capital charge for Solvency II with reference to the end of January 2024.
Technical information on risk-free interest rate term structures
On 5 February, EIOPA relating to risk-free interest rate (RFR) term structures with reference to the end of January 2024.
EIOPA: February Insurance Risk Dashboard
On 5 February, EIOPA (based on Q3 2023 Solvency II data) that shows insurers鈥� exposure to market risk remains at high level and a main concern for the sector. EIOPA notes macro-related risks, as well as digitalisation and cyber risks are still relevant but have decreased to medium levels while the risk levels for the remaining risk categories are at medium levels.
ESA鈥檚 Joint Board of Appeal
On 6 February, EIOPA (鈥渢he Board鈥�) of the European Supervisory Authorities (EBA, EIOPA and ESMA 鈥� the ESAs) to dismiss the appeal brought by Dubai Commodities Clearing Corporation (鈥淒CCC鈥�) against the European Securities and Markets Authority (鈥淓SMA鈥�) and to therefore confirm the ESMA decision to withdraw its recognition.
EIOPA appoints National Bank of Belgium Vice-Governor
On 13 February, EIOPA , Vice-Governor of the National Bank of Belgium, to EIOPA鈥檚 Management Board. Mr Vaneckere begins his two-and-a-half-year term on 13 February 2024. He is taking over from Ms Else Bos, who stepped down from her position at De Nederlandsche Bank at the end of last year.
Shocked risk-free interest rate term structures
On 19 February, EIOPA (RFR). These term structures are used to calculate the 鈥淥ption-adjusted鈥� duration of technical provisions to be reported in the context of the Guidelines for reporting for financial stability purposes (S.38.01.11 - Duration of technical provisions). The shocked RFR aims to ensure consistent calculation of the 鈥淥ption-adjusted鈥� duration. EIOPA will update the term structures and publish them twice a year on its website. The next update is coming in July 2024.
EIOPA seeks new members to join its Stakeholder Groups
On 26 February, EIOPA launched a call for expression of interest to select new members of the Insurance and Reinsurance Stakeholder Group (IRSG) and the Occupational Pensions Stakeholder Group (OPSG). EIOPA establishes these stakeholder groups to encourage feedback and foster constructive cooperation with a diverse range of relevant stakeholders in a structured approach.
Other updates
EC: Solvency II
The European Commission (EC) has on the renewal of its determination that the solvency regime in force in the United States (US) applicable to undertakings with their head office in that country is provisionally equivalent to that laid down in the Solvency II Directive. It applies from 1 January 2016 and expires on 1 January 2026.
The Solvency II Directive provides that provisional equivalence is subject to renewals for further periods of ten years where certain specified criteria continue to be met. Since it has been concluded between EC services and EIOPA that the factual statements set out in EC Delegated Decision relating to the US have not changed, the draft EC Delegated Decision will renew the US provisional equivalence for ten years starting from 1 January 2026. The consultation closes to feedback on 5 March 2024 and the EC intends to adopt the EC Delegated Decision in Q1 2024.
EP/CoEU: Delay to Sustainability Reporting Standards
The European Parliament (EP) and the Council of the EU (CoEU) have announced that they had the deadline for adopting European Sustainability Reporting Standards (ESRS) for certain sectors and for certain third-country undertakings.
The proposal postpones the deadline for the European Commission (EC) to adopt sector-specific standards and standards to be used by certain non-EU companies by two years to 30 June 2026. This will give companies more time to comply with the horizontal standards adopted in July 2023. The provisional agreement supports the objectives of the ECs proposal but, during trialogue negotiations, the legal format of the proposal was changed from being a Decision to a Directive. Member states will not need to transpose this Directive however, since the targeted amendments concern the empowerment to adopt delegated acts granted to the EC.
IE: Consumer hub showcases new practices
On 6 February, Insurance Europe (鈥業E鈥�) that highlights the continuous efforts across Europe鈥檚 various insurance markets to innovate and to enhance products and services for consumers. The Consumer Hub provides a non-exhaustive list of examples of pro-consumer initiatives in a number of areas including:
- Innovative products and services;
- Digitalisation;
- Enhanced claims management;
- Transparency and financial education;
- Clarity of covers and exclusions;
- Innovative risk management techniques;
- Initiatives to fight insurance fraud; and
- Good practices in conduct of business.
IE: Concerns about EU tax plans
On 24 January, IE published its views on the European Commission鈥檚 proposal for a 鈥楤usiness in Europe: Framework for Income Taxation鈥� (鈥楤EFIT鈥�) (PDF, 501 KB). IE notes the Insurance Industry supports the goal of harmonising corporate tax rules across the EU, but that it raises serious reservations about the current draft EU directive. IE notes the Insurance Industry is concerned about the interplay between the proposed European Framework and existing legislation, most notably the EU鈥檚 Minimum Corporate Taxation Directive and the Country-by-Country Reporting (鈥楥bCR鈥�) Directive.
IAIS: Newsletter December 2023 鈥� January 2024
On 31 January, the International of Association of Insurance Supervisors (鈥業AIS鈥�) (PDF, 1.2 MB) 鈥� January 2024. The newsletter focuses on the recent publications by the IAIS, including the 2023 Global Insurance Market Report (鈥楪IMAR鈥�), the 2024 Roadmap, the Issues Paper on Roles and Functioning of Policyholders Protection Schemes, and the members-only Report on Artificial Intelligence and Machine Learning in the Insurance Sector.
UK updates
PRA: Insurance Supervision: 2024 priorities
On 11 January, the Prudential Regulation Authority (PRA) to Chief Executive Officers of PRA-regulated Insurance to outlining their priorities for the coming year.
EIOPA Q&As
Please see below for EIOPA鈥檚 response to recent queries which have been raised by the public for further clarification on the Solvency II requirements. The Solvency II requirements may change or become more prescriptive over time.
8 January: QRT S.01.01
EIOPA clarified in Q&A () that insurance and reinsurance undertakings which are not part of a group referred to in points (a), (b) or (c) of Article 213(2) of Directive 2009/138/EC and the parent undertaking of which is a mixed-activity insurance holding company shall submit annually the S.36s templates.
8 January: QRT S.01.01
EIOPA clarified in Q&A () that, every income protection insurance or reinsurance obligation, other than workers' compensation insurance or reinsurance obligation, included in LoB 29 should be taken into account in the first part of the formula set out in Article 163(1) DR and every medical expense insurance obligation, other than workers' compensation insurance or reinsurance obligation, that is included in LoB 29 and that covers medical expenses resulting from an infectious disease should be taken into account in the second part of the formula set out in Article 163(1) DR.
Further information
For more on any of the items above, or any Insurance-related queries, contact .
