The European Insurance and Occupational Pensions Authority (EIOPA) has launched a public consultation on Guidelines related to the preparation for Solvency II. The purpose of the Guidelines is to support both National Competent Authorities (NCA’s) and undertakings in their preparation for the Solvency II requirements.
The Guidelines cover the areas that EIOPA considers fundamental to ensure effective preparation for 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 National Competent Authorities(NCA’s); pre-application of internal models.
It is up to NCAs to determine how to comply with EIOPA’s Guidelines by incorporating them into their regulatory or supervisory framework in an appropriate manner.
NCAs are expected to ensure that insurance companies and groups take active steps towards implementing the relevant aspects of the regulatory framework addressed in these Guidelines, so that when Solvency II is applicable, its requirements can be fully complied with. However, EIOPA makes it clear that the Guidelines should be applied in a proportionate way and in particular with regard to the burden on small and medium size undertakings.
The public consultation will end on 19th June. EIOPA intends to subsequently publish the final Guidelines in the autumn of this year. This should allow NCAs to put in place certain important aspects of the preparation for Solvency II starting on 1st January 2014.
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