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No justification for major new measures on systemic risk for EU insurers

Insurance Europe says there is no justification for new macroprudential measures for EU insurers. This comes in response to a question raised by the European Commission to the European Insurance and Occupational Pensions Authority (EIOPA) on whether the existing provisions of the Solvency II framework allow for an appropriate macro-prudential supervision.

Insurance Europe highlighted that the current Solvency II regulatory framework ensures that any issues leading to concerns about systemic risk can be identified and managed in a timely manner.

The existing framework already includes specific reporting requirements for financial stability, biannual financial stability reports and the biennial stress test, as well as liquidity management requirements that are part of the own risk and solvency assessment and the system of governance.

More generally, while it is theoretically possible for real systemic risks to emerge from the insurance sector, the existence of systemic risk in insurance has not been adequately substantiated.

Insurance Europe also noted that the scope of EIOPA’s work in this case goes beyond what it was asked to advise on by the Commission.

Published 6 May 2019