The European Insurance and Occupational Pensions Authority (EIOPA) published today its Technical Advice to the European Commission on the Regulatory Technical Standards on the recovery plans and finance schemes to be provided by insurers in case of non-compliance with Solvency and Minimum Capital Requirements (SCR, MCR) under Solvency II. In this paper EIOPA also identifies a list of supervisory measures that can be taken by supervisors in case of deteriorating financial conditions of companies.
In its advice EIOPA
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Describes in detail the information required from companies when they do not comply with SCR or MCR;
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Advocates the submission of one combined recovery plan and finance scheme in case of simultaneous non-compliance with both SCR and MCR;
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Highlights the criteria for the supervisory approval of the submitted recovery plan or finance scheme;
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Provides a non-exhaustive list of the measures that can be taken by supervisors towards the relevant companies where their solvency position deteriorates further;
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Describes the circumstances to be taken into account by supervisors when deciding on the measures to be adopted.
EIOPA believes that the provisions of its Advice allow for a quick and precise supervisory response to be applied when interests of policyholders are at risk due to the delicate financial situation of the insurance company.
The Technical Advice was produced upon the request by the European Commission for advice on the content of the delegated acts related to Articles 138 (2), 139 (2) and 141 of the Solvency II Directive.
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