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Insurers call on EIOPA to minimise any detrimental impacts from IBOR transition

28-7-2021

Insurance Europe has published its response to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on IBOR transitions.

Insurance Europe supports EIOPA’s proposed approach of implementing an immediate switch from IBOR-based to OIS-based risk-free rate curves subject to appropriate liquidity and proximity preconditions.

As this is a technical change to the risk-free rate curve, any detrimental impacts should be minimised. EIOPA should ensure full transparency on the potential impact of the IBOR transition to ensure that it can be appropriately considered in the context of the review of Solvency II.

To avoid undue solvency volatility, EIOPA should also ensure that the preconditions do not result in instability in key parameters used to derive the risk-free curve.

Moreover, regular communication from EIOPA on the progress of the transition would help to prepare insurers for a change and could support a speedier adoption of new OIS-based curves.

Finally, EIOPA must provide sufficient time to implement the switch and give due consideration to the impact on insurers’ risk management.


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