Battle lines drawn for Solvency II as QIS5 published

Buried deep within the 330 page document is a section on simplifications for captives that suggests that some of the concerns expressed to CEIOPS, the Commission and national politicians in recent months about the limited applicability of the simplifications to captives may have been addressed. A number of leading European risk managers have told Commercial Risk Europe in recent weeks that they are confident that the efforts made by FERMA and ECIROA to ensure that captives receive proportional treatment in the final rules will bear fruit. But formal comment on the latest documents are not available yet (see coming July/August issue of Commercial Risk Europe for more details). CEIOPS will run the QIS5 exercise between August and November so that it can provide quantitative input to the finalisation of the Commission's proposal on level 2 implementing measures for the Directive.hideIn its call for advice in the form of a letter to Gabriel Bernadino, Chairman of CEIOPS, David Wright of the Commission noted it had made a number of changes to the technical specifications following extensive consultation. Mr. Wright said that the Commission is aware that not all stakeholders or Member States are ‘totally satisfied’ with the choices made by the Commission in the technical specifications but stressed that it had done its best to reconcile the different positions and to test compromise approaches wherever possible. “As the Commissioner (Barnier) indicated, it is important to reach a balanced approach in QIS5 that takes supervisory as well as general concerns into account. It is very important to stress that QIS5 is a test. This point should be clearly communicated to the participating undertakings,” stated Mr. Wright. He explained that the technical specifications should not be seen as a pre-judgement of the final outcome of the discussions on the level 2 implementing measures. The intention of the Commission is to publish the proposal on level 2 implementing measures once the results of QIS5 are known to ensure that the final policy decisions are made on an ‘informed basis’, he said. Mr. Wright stressed that the Commission expects much higher participation in this impact study than before and particularly from smaller undertakings. “The Call for Advice sets out an expected participation of at least 60% of insurance undertakings and 75% of insurance groups. It is particularly important that smaller insurance undertakings as well as reinsurance undertakings and specialised insurance providers are included. We also need a representative geographical coverage throughout the EU and participation of insurance undertakings in all Member States,” he said. To help ensure that this happens, Mr. Wright said that he welcomes recent efforts by CEIOPS to make its spreadsheets more user-friendly. Captive owners will be particularly pleased to hear that he told CEIOPS: “They should in particular not overburden small and medium-sized undertakings. I would also like to reiterate my support for your idea to develop a QIS5 user manual in order to help in particular those undertakings which are new to QIS exercises.” “I believe that a close cooperation between the insurance industry and supervisors is essential for the success of the QIS5 exercise. Supervisors should invite insurance and reinsurance undertakings to participate in QIS5 and provide appropriate support, in particular through an efficient question and answer procedure, seminars and where appropriate, communication through trade associations,” he added.

Battle lines drawn for Solvency II as QIS5 published

Want to read this article?

Read Next

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Zurich appoints Adriana Scherzinger group head of captives

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Zurich appoints Adriana Scherzinger group head of captives

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Want to read this article?

Read Next

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Zurich appoints Adriana Scherzinger group head of captives

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Related Articles