The ECB has published the “Guide on climate-related and environmental risks” in November 2020 to encourage banks to facilitate investments in a more sustainable economy. This guide outlines the ECB’s take on the prudent management of climate risk and describes how the institutions are expected to integrate that dimension into their already existing risk management framework in the form of 13 recommendations. This article outlines our interpretation of the ECB guide and presents some key points to facilitate understanding and implementing those regulatory expectations from the point of view of banking institutions.

First in the series of blog posts that are to shed more light on the multitude of different changes in the Solvency 2 framework that are to arise from the solvency 2020 review. On the basis of EIOPAs opinion, as well as some other documents this paper sets out to primarily discuss the Volatility Adjustment and the number of concerns regarding the current provisions that either EIOPA or the national supervisors may have together with some proposals of addressing these concerns. The said concerns cover everything from the lack of clarity on the underlying assumptions of VA, to the possibility of cliff-edge effect from the EU member state VA during some particular periods. The secondary topic of this article is the General Application Ratio and the level it should be set to. The EIOPA argues it should be in the region between 65% to 85%.

Climate change poses a serious risk for society and for (re)insurers, with the harmful impact of global warming already being visible. Without further international climate action, global average temperatures and the associated physical risks will continue rising, resulting in increased underwriting risk of insurers, impacting asset values, and challenging their business strategies. On the 5th October 2020, the EIOPA has published a consultation paper on the use of climate change risk scenarios in the ORSA in the form of a draft supervisory Opinion. The consultation is a follow-up to the Opinion on Sustainability within Solvency II released in September 2019 which recommended that (re)insurers should consider climate risks beyond the one-year time horizon within their system of governance, risk-management system and ORSA.

The global COVID-19 pandemic has forced governments all over the world to impose strict measures intended to defend their healthcare systems. These measures have had a significant adverse effect on many business and economic lives of private individuals, more specifically: liquidity issues and difficulty in due payments of financial obligations. In answer to the expected liquidity shortfall, Member States implemented wide range of supportive (economic) measures, including certain forms of moratoria on payment of financial obligation, to address short-term operational and liquidity issues faced by business and private individuals. This paper looks at the latest guidelines on moratoria in face of COVID 19 and its impact on the already existing moratoria.

This article focuses on giving an overview of the Insurance Capital Standard (ICS), a capital framework which has been developed by International Association of Insurance Supervisors (“IAIS”). The ICS is being developed as a group-wide prescribed capital requirement (PCR), which is a solvency control level above which the supervisor does not intervene on capital adequacy grounds. The ICS is not intended to replace existing arrangements or capital standards for legal entity supervision in any jurisdiction.