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Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

Solvency II does not aim at protecting economic operators: Will the IRRD do?

25 May 2023
Knowledge Base

In 2021, the EFTA Court delivered an interesting judgment. Maybe it passed unnoticed as COVID was still raging through our normal working habits. But in the context of the current Solvency II (SII) review, including the proposed new Insurance Recovery and Resolution directive (hereafter IRRD), it might be useful to read this case again. The case concerned two French non-life insurance undertakings who sought to hold the Liechtenstein Financial Supervisory Authority (FMA) liable for failing to fulfil its supervisory obligations towards a Liechtenstein insurer who became insolvent, and who was in three capacities a creditor to the French insurers. The claimants were thus not insured persons under an insurance contract or a policyholder of the Liechtenstein insurer. Continue reading…

IAIS publishes report assessing implementation of the Holistic Framework insurance standards in ten major markets

21 April 2023
Knowledge Base

The International Association of Insurance Supervisors (IAIS) has on 4 April published its report on the targeted jurisdictional assessment (TJA) of the implementation of the Holistic Framework supervisory material. The Holistic Framework for the assessment and mitigation of systemic risk in the insurance sector (Holistic Framework) was adopted by the IAIS in November 2019 and endorsed in December 2022 by the Financial Stability Board. The Holistic Framework recognises that systemic risk may arise not only from the distress or disorderly failure of an individual insurer, but also from insurers’ collective exposures and activities at a sector-wide level. It consists of an integrated set of macroprudential supervisory policy measures, a Global Monitoring Exercise and – as a key element – implementation assessment activities.   Continue reading…

Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

Remember the Covered Agreement?

03 April 2023
Knowledge Base

In September 2017, the European Union and the US (US Treasury Department) announced that they had signed a Covered Agreement, formally titled Bilateral Agreement Between the United States of America and the European Union On Prudential Measures Regarding Insurance and Reinsurance (Agreement)[1*], on which negotiations had begun several years earlier. For the US, the Agreement requires States to eliminate reinsurance collateral within 5 years or risk preemption, i.e., federal law would displace, or preempt state law, due to the Supremacy Clause of the US Constitution. Without the Agreement, reinsurance companies that are not licensed in the U.S. must post 100% collateral to secure the transaction, unless they are a Certified Reinsurer or a Reciprocal Jurisdiction Reinsurer. If not licensed or approved to accept reinsurance, they are an Unauthorised Reinsurer. Companies that have a head office or are domiciled in Reciprocal Jurisdictions can become Reciprocal Jurisdiction Reinsurers if they meet the standards in certain model laws, in which case these companies are not required to post collateral. Continue reading…

IAIS finalises criteria that will be used to assess whether the Aggregation Method provides comparable outcomes to the Insurance Capital Standard

28 March 2023
Knowledge Base

The International Association of Insurance Supervisors (IAIS) has reached an important milestone in the comparability assessment project – an initiative that will ascertain whether the Aggregation Method (AM) provides comparable outcomes to the Insurance Capital Standard (ICS). The IAIS has agreed on the criteria that will be used to assess whether the AM provides comparable outcomes to the ICS, following public consultation and the resolution of comments published on 9 March. This marks the finalisation of an important step for the comparability assessment project and equips the IAIS to begin the comparability assessment in Q3 2023.  Continue reading…

The Arkansas Insurance Department joins IAIS cooperation and information exchange agreement

01 March 2023
Knowledge Base

The Arkansas Insurance Department has become a member of the International Association of Insurance Supervisors (IAIS) Multilateral Memorandum of Understanding (MMoU) – an international supervisory cooperation and information exchange agreement. “We are pleased to welcome Arkansas as a signatory to the MMoU,” said Vicky Saporta, Chair of the IAIS Executive Committee. “As we have experienced over the recent years of social and economic challenges, there are enormous benefits for the global insurance sector when supervisors are able to cooperate quickly and effectively across jurisdictions. The MMoU is an essential regulatory tool for supervisors to foster safer and more stable insurance markets.” Continue reading…

IAIS 2023-2024 Roadmap outlines two-year workplan addressing key risks and trends in the insurance sector

19 January 2023
Knowledge Base

The International Association of Insurance Supervisors (IAIS) published its 2023-2024 Roadmap. The Roadmap outlines the IAIS’ work programme for the next two years and is guided by the 2020-2024 Strategic Plan. “In the 2023-2024 period, the IAIS will prioritise efforts on key multi-year projects while also responding to the many global issues and trends facing the insurance sector,” said IAIS Executive Committee Chair, Vicky Saporta. Continue reading…

Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

Stressing cyber risks

06 December 2022
Knowledge Base

In its July dashboard, EIOPA (the European Insurance and Occupational Pensions Authority) revealed that digitalisation and cyber risks have become one of the most important risks for the European insurance sector, which a risk level equating to market and macro risks. The main driver is cyber security risk, followed by cyber underwriting risk. Elements contributing are the current war between Russia and Ukraine, increased reliance on remote and telework and on digital solutions and infrastructure. In that context, EIOPA published on 24 November 2022 a Discussion Paper on Methodological Principles of Insurance Stress Testing with focus on Cyber Risk. Deadline for response is 28 February 2023. Continue reading…

Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

Capital relief in times of exceptional market-wide shocks

11 November 2022
Knowledge Base

In the proposals the Commission tabled in September 2021 reviewing the current Solvency II directive, a series of new macro-prudential tools have been introduced. Among those, a new Article 144 c has been put forward. According to its title, the article concerns “Supervisory measures to preserve the financial position of undertakings during exceptional market-wide shocks”. The current Solvency II directive only has provisions regarding supervisory powers in deteriorating financial conditions of individual (re)insurance undertakings (article 141). To avoid a repetition of the regulatory bricolage witnessed during (the early days of) the COVID-19 pandemic, and the ink spilled on this topic, the Commission has now provided this solution. Continue reading…

Financial watchdog warns insurers to protect customerswellbeing during cost of living squeeze

06 October 2022
Knowledge Base

The Financial Conduct Authority (FCA) is concerned that as pressure mounts on household budgets some customers may cut-back on the insurance they need, leaving them without protection. The government has announced further support for consumers and businesses for energy costs and in the September fiscal event, including a two-year energy-price guarantee for households. While this will help tackle the pressure on household budgets, some people may still consider cutting back on insurance cover. The FCA is taking action to support households, by writing to insurance industry CEOs to make sure their customers are protected from unnecessary products or add-ons and unfair penalties. Where poor practise is found, the FCA will quickly intervene to protect customers from harm.  Continue reading…

FCA sets out potential interventions to reform multi-occupancy buildings insurance market

27 September 2022
Knowledge Base

The Financial Conduct Authority (FCA) has on 21 September set out a range of recommendations and other potential remedies designed to give leaseholders greater protections from high prices and ensure the buildings insurance market operates better for leaseholders. Since the Grenfell tragedy leaseholders have been faced with substantially increased costs of insurance. In light of this, the FCA was asked to carry out a review into the market for multiple-occupancy residential buildings insurance and explore ways to provide better value cover for leaseholders.  Continue reading…