Brussels, 14 March 2011
Quantitative Impact Study results show insurance and reinsurance undertakings are well positioned to meet new Solvency II capital requirements
The European Insurance and Occupational Pensions Authority (EIOPA) has today published the results of a Quantitative Impact Study. The European Commission welcomes those results which show that while technical refinements of certain matters are still needed, insurance and reinsurance undertakings are well positioned to meet the new Solvency II capital requirements. The Solvency II Directive to be implemented by 1 January 2013 sets the framework for the next generation of supervisory rules for insurance and reinsurance companies in the EU. The rules of the Solvency II Directive need to be complemented by implementing measures, which will be adopted by the Commission this year. The Quantitative Impact Study (QIS5) was run by the EIOPA from August to November 2010 (IP/10/1064) to ensure that the finalisation of the implementing measures is based on sound, empirical data. This is the fifth quantitative impact study conducted in the context of the elaboration of the new insurance and reinsurance framework.
The European Commission welcomes the results of the study which show that:
EIOPA's report confirms that the insurance industry has risen to the challenging participation target set as almost 70% of undertakings, compared to 33% in QIS4 participated in the exercise.
The Commission will continue its technical work on the implementing measures, taking into account the results of QIS 5 during the course of the second quarter of 2011 and intends to publish its proposal for the Solvency II level 2 implementing measures by the end of the year.
On Solvency II
The aim of the Solvency II framework is to ensure that insurance and reinsurance undertakings are financially sound and can withstand adverse events in order to protect policy holders and the stability of the financial system as a whole. In addition to quantitative requirements, such as capital requirements (Pillar 1), insurance and reinsurance companies will be required to meet qualitative requirements relating to governance and risk-management (Pillar 2), as well as to regularly disclose information to supervisors and to the public (Pillar 3).
The Solvency II framework will consist of the rules contained in the level 1 Solvency II Directive (2009/138/EC) – as implemented by the Member States – as well as level 2 Implementing Measures and supervisory measures, i.e. so-called level 3 implementing Technical Standards and non-binding guidelines. The new rules will be applicable from 1 January 2013 onwards.
On QIS 5
QIS5 is the latest in a series of studies initiated by the Commission in order to ensure the most accurate formulation of the Solvency II framework. QIS1 to QIS4 took place between 2005 and 2008. The results of these studies provided the empirical basis for the preparation by the Commission of the Solvency II Directive (2009/138/EC). The Solvency II Directive must be accompanied by a number of detailed, technical rules laid down in implementing measures, to be adopted by the Commission later this year. QIS 5 was necessary in order to test different scenarios and parameters, allowing the Commission to calibrate correctly the technical rules in the implementing measures.
The results of QIS5 are based on undertakings' financial position at the end of 2009.