On 15 October 2019, the European Insurance and Occupational Pensions Authority (EIOPA) published a draft opinion on technical advice for the 2020 review of the Solvency II Directive (2009/138/EC). Responses to the draft technical advice are invited by 15 January 2020 to enable EIOPA to publish a final opinion by June 2020. The European Commission published a call for technical advice on the Directive from EIOPA in February 2019.
Solvency II requires that particular areas of the Solvency II Directive are reviewed by 1 January 2021. The areas are:
- long-term guarantees and measures on equity risk;
- methods, assumptions and standard parameters used when calculating the Solvency Capital Requirement (SCR) standard formula;
- rules and practices in respect of the calculation of the Minimum Capital requirement; and
- group supervision and the management of capital within a group.
The call for advice from the Commission included topics additional to those mandated by the Solvency II Directive, including:
- transitional measures;
- the risk margin;
- elements related to the Capital Markets Union;
- macro-prudential issues;
- recovery and resolution;
- freedom to provide services and freedom of establishment;
- proportionality and thresholds;
- best estimate;
- own funds at solo level;
- Insurance guarantee schemes (already consulted upon); and
- Reporting and disclosure (already consulted upon).
The opinion on technical changes to Solvency II leaves fundamental aspects of the Directive unchanged but is nevertheless extensive in scope. In addition to providing a written response to the opinion a stakeholder event on the review is planned by EIOPA for December 2019.
To accompany the review EIOPA has also published a background document which includes a qualitative assessment of the combined impact of the proposed technical changes.