Edition Highlights:

  • European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority asked to provide an opinion on proposed amendments to the draft regulatory technical standard.
  • Insurance Europe issues responses to the International Association of Insurance Supervisors (IAIS) consultation on Risk-based Global Insurance Capital Standard Version 1.0.
  • The Association of British Insurers (ABI) address concerns regarding the General Data Protection Regulation (GDPR).

 

Current coverage period: Through Nov. 30, 2016

Note: Anticipated business impact for covered regulations is shown using the following rating legend:       (*Low) (** Medium) (*** High)

 

CURRENT REGULATIONS:

 

European Insurance and Occupational Pensions Authority (EIOPA) (**):
Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 (Text with EEA relevance)
Publication Date: November 29th 2016

Regulation Type: Final Rule

Category: Accounting

The European Commission has adopted Commission Regulation (EU) 2016/2067 which amends Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 “Financial Instruments.” This Regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.1

 

Prudential Regulation Authority (PRA)( ***):
Solvency II: Internal models – assessment, model change and the role of non-executive directors
Publication Date: November 25th 2016

Regulation Type: Final Rule

Category: Prudential
The PRA has issued a supervisory statement setting out its expectations of firms regarding internal models. The supervisory statement covers the internal model applications; the assessment of credit risk; dealing with variability in premium provisions; the effect of stresses on the volatility adjustment; the role of non-executive directors; model justification and validation and the role of boards; the PRA’s use of quantitative analysis in approving models; and scope, identification and classification, governance and reporting of internal model changes.2

 

European Insurance and Occupational Pensions Authority (EIOPA) (***):
Commission Delegated Regulation (EU) 2016/1904 of 14 July 2016 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council with regard to product intervention
Publication Date: October 31st 2016

Regulation Type: Final Rule

Category: Prudential
The European Commission has adopted a Regulation Supplementing Article 16(8) and Article 17(7) of Regulation No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs). The Regulation seeks to establish a common standard for key information documents relating to PRIIPs. It will be applicable as of December 31, 2016.3

 

Prudential Regulation Authority (PRA)( ***):
Solvency II: Monitoring model drift and standard formula SCR reporting for firms with an approved internal model
Publication Date: October 25th 2016

Regulation Type: Final Rule

Category: Prudential
The PRA has published a supervisory statement relevant to Solvency II UK solo insurance firms setting out its expectations of firms with an approved internal model, and providing further information on the PRA’s approach to monitoring model drift and the reporting of standard formula Solvency Capital Requirement (SCR) information.4

 

Insurance Europe (IE) (**):
Comments on the need to modernise VAT rules for financial services
Publication Date: November 30th 2016
Regulation Type: Guidance

Category: Accounting
The IE has issued comments calling for Value Added Tax (VAT) rules for financial services to be reformed. According to the IE, the area’s most in need of updating are the scope of exemptions, VAT grouping, outsourcing and third-party delegation, and the transfer of insurance and reinsurance contracts.5

 

Insurance Europe (IE) (*):
Response to European Commission communication on the call for evidence: More ambition required to boost EU economic growth
Publication Date: November 23rd 2016

Regulation Type: Guidance

Category: Prudential
Michaela Koller, Director General of Insurance Europe, delivered a statement following the publication of the European Commission communication on the call for evidence on the European Union regulatory framework for financial services. She comments that more is required for the Commission to reach its goals, particularly with regards to capital requirements, and she expresses disappointment that the Commission has not provided clarity on how it intends to make regulation future-proof.6

 

European Insurance and Occupational Pensions Authority (EIOPA) ( **):

Call for Evidence: A roadmap for fine-tuning rules for financial services to support growth and investment
Publication Date: November 23rd 2016
Regulation Type: Guidance

Category: All
The European Commission (EC) has published a fact sheet regarding a call for evidence on the overall financial services regulatory framework. The call for evidence was launched because the EC believes that it is important to monitor the continuing development, early implementation and functioning of recently adopted European Union legislation, which aims to restore financial stability and market confidence, to check that they are delivering as intended.7

 

Association of British Insurers (ABI)(*):
Treasury select committee inquiry into Solvency II summary response from Association of British Insurers
Publication Date: November 11th 2016
Regulation Type: Guidance

Category: Prudential
The ABI has responded to the Treasury Select Committee’s inquiry into Solvency II. The response states that the ABI has been supportive of Solvency II’s overall principles but it believes there are a range of outstanding issues that still need to be addressed. Some of these relate to the UK implementation of Solvency II while others would need change at the EU level. The ABI does not support withdrawing from Solvency II now while the UK is still a member of the EU as there is legal risk to the UK in doing so.8

 

Financial Crimes Enforcement Network (FinCEN)( ***):
FinCEN issues advisory to financial institutions on cyber-events and cyber-enabled crime
Publication Date: October 25th 2016
Regulation Type: Guidance

Category: Others
The FinCEN has issued an advisory to financial institutions on cyber-events and cyber-enabled crime. In addition to the advisory, FinCEN has issued FAQs regarding the reporting of cyber-events, cyber-enabled crime, and cyber-related information through Suspicious Activity Reports.9

 

Belgian Financial Services and Markets Authority (FSMA)( *):

On the bill to amend the Law of 4 April 2014 on insurance with a view to adjusting to the digitisation of operations
Publication Date: November 16th 2016
Regulation Type: Guidance
Category: Others
The Belgian FSMA has published the Insurance Commission’s opinion in response to the draft law on insurance for the purposes of adapting to the digitization of operations. The aim of the bill is to adapt certain terms so that the law becomes “technologically neutral.” The Commission agrees with the overall objective and it believes, among other things, that there needs to be further examination into whether current legislation already provides an adequate legal framework for digitization in the insurance sector.10

 

Prudential Regulation Authority (PRA) (*):
Solvency II: Reporting of National Specific Templates – CP37/16 UPDATED
Publication Date: November 16th 2016
Regulation Type: Consultation

Category: Prudential
The PRA has withdrawn its consultation paper proposing changes to National Specific Templates (NSTs), relevant to all UK Solvency II firms. This follows feedback from a number of firms that they plan to report in XBRL-enabled Microsoft Excel format for the financial year ending 2016. The reporting clarifications and technical corrections will be identical to those proposed in CP37/16; and (ii) a later consultation paper setting out proposals for the future reporting of National Specific Templates.11

 

European Insurance and Occupational Pensions Authority (EIOPA)(***):
The European Commission invites European Supervisory Authorities to amend PRIIPs rules and develop guidance
Publication Date: November 11th 2016
Regulation Type: Consultation

Category: Compliance
The European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), and known as the European Supervisory Authorities (ESAs), have been requested by the European Commission to submit an Opinion on proposed amendments to the draft Regulatory Technical Standards (RTS) on key information documents (KID) for packaged retail and insurance-based investment products (PRIIPs). The Commission has set out the proposed amendments and has requested the Opinion to be submitted within six weeks. Additionally, the Commission has requested that the ESAs develop guidance in line with the relevant provisions of the RTS on the practical application of credit risk mitigation factors for insurers.12

 

European Commission (EC)(**):
European Commission sets up an internal task Force on financial technology
Publication Date: November 14th 2016
Regulation Type: Consultation

Category: Others
The European Commission has launched a Task Force on Financial Technology. The Task Force is intended to assess and make the most of innovation in financial technology (FinTech), while also developing strategies to address the potential challenges posed by FinTech.13

 

Prudential Regulation Authority (PRA)( **):
Cyber insurance underwriting risk
Publication Date: November 14th 2016
Regulation Type: Consultation

Category: Others
The PRA has published a consultation paper setting out a proposed new supervisory statement on cyber insurance underwriting risk. The proposed supervisory statement sets out the PRA’s expectations for the prudent management of cyber underwriting risk. Cyber underwriting risk is defined, for the purposes of this consultation, as the set of prudential risks emanating from underwriting insurance contracts that are exposed to losses resulting from a cyber-attack. The consultation runs until February 14, 2017.14

 

International Association of Insurance Supervisors (IAIS)( **):
Publication of application paper on approaches to supervising the conduct of intermediaries
Publication Date: November 15th 2016
Regulation Type: Consultation

Category: Compliance
The IAIS has published an Application Paper on Approaches to Supervising the Conduct of Intermediaries. The paper documents ideas on approaches that IAIS members might consider when developing or revising a regime for the supervision of intermediaries.15

 

Swiss Financial Market Supervisory Authority (FINMA)( **):
FINMA defines its strategic goals for 2017 to 2020
Publication Date: November 16th 2016
Regulation Type: Consultation

Category: All
The Swiss FINMA has defined seven strategic goals for the period 2017 to 2020. Its priorities for this period will be on financial institutions’ stability, proper business conduct, a pro-innovation approach to supervision and regulation, and tackling newly emerging risks, such as cyber risks.16

 

Insurance Europe (IE)( ***):
Response to consultation on Risk-based Global Insurance Capital Standard Version 1.0
Publication Date: November 1st 2016
Regulation Type: Response to Consultation

Category: Prudential
The IE has issued its response to the International Association of Insurance Supervisors consultation on Risk-based Global Insurance Capital Standard Version 1.0. The response covers issues such as Insurance Capital Standard calculation, market-adjusted valuation, Margin Over Current Estimate, reinsurance, capital resources, and capital requirements, among other things.17

 

European Commission (EC)(*):
Commission extends the application date of the PRIIPs Regulation by one year
Publication Date: November 9th 2016
Regulation Type: Response to Consultation

Category: Compliance
The European Commission is proposing to extend the application date of the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation by one year, which is currently due to come into force on December 31, 2016. The Commission has given the European Supervisory Authorities six weeks to submit revised Regulatory Technical Standards (RTS) to it. If the RTS are adopted, it is anticipated that the revised PRIIPs framework will be in place during the first half of 2017 and apply as of January 1, 2018.18

 

Association of British Insurers (ABI)( **):
Response to EIOPA consultation on draft ITS on a standardised format of the IPID
Publication Date: October 27th 2016
Regulation Type: Response to Consultation

Category: Compliance
Insurance Europe (IE) has issued its response to the European Insurance and Occupational Pensions Authority (EIOPA) consultation on the draft Implementing Technical Standards (ITS) on a standardized format for the Insurance Product Information Document (IPID). In the response, IE calls for EIOPA to maintain an appropriate level of standardization for the IPID, as well as a digital-friendly format, and warns that insurance companies should be allowed enough time to implement the changes.19

 

Association of British Insurers (ABI)(***):
GDPR Key Implementations
Publication Date: October 20th 2016
Regulation Type: Response to Consultation

Category: Others
The ABI has addressed concerns regarding the implementation of the General Data Protection Regulation (GDPR). The concerns addressed include: A) processing of personal data relating to criminal convictions and offences; B) consent for third parties; C) automated individual decision-making, including profiling; D) right of data portability; E) fair processing notices; and F) interpretation of language within the GDPR text.20

 

The Department of the Treasury (DOT)( **):
Treasury’s Federal Insurance Office releases first annual consumer report
Publication Date: November 21th 2016
Regulation Type: Report

Category: Compliance
The US DOT Federal Insurance Office (FIO) has released its first annual “Report on the Protection of Consumers and Access to Insurance.” The first-of-its-kind report addresses a range of consumer protection issues that are critical to the functioning of a stable and fair insurance marketplace.21

 

Financial Stability Board (FSB)( *):
2016 list of global systemically important insurers (G-SIIs)
Publication Date: November 21st 2016
Regulation Type: Report

Category: Prudential
The FSB has published the 2016 list of global systemically important insurers (G-SIIs). The insurers on the 2016 G-SII list remain the same as those on the 2015 list. A total of 9 insurers have been identified as G-SIIs.22

 

Financial Stability Board (FSB)( **):
Financial Stability Board agrees 2017 workplan
Publication Date: November 17th 2016
Regulation Type: Report

Category: All
The FSB has announced that the agency has met to discuss current vulnerabilities, on-going policy work and its workplan for 2017. Topics covered included: current market developments and vulnerabilities; global systemically important financial institutions; resilience, recovery and resolvability of central counterparties; structural vulnerabilities from asset management activities; correspondent banking; task force on climate-related financial disclosures (TCFD); work on implementation and efforts of reforms; transforming shadow banking into resilient market-based finance and issues for authorities relating to fin-tech.23

 

Central Bank of Ireland (CBI)( *):
Consumer Protection and Fintech – Role of the Supervisory Authority
Publication Date: November 15th 2016
Regulation Type: Speeches

Category: Compliance & Others
Director of Consumer Protection at the Central Bank of Ireland Bernard Sheridan has addressed participants at the FinCoNet AGM 2016 on the topic of “Consumer Protection and Fintech – the Role of the Supervisory Authority.” He discussed the importance of supervisory authorities in protecting the interests of consumers and the challenges that the pace and scale of Fintech innovation can present.24

 

Visit www.accenture.com/RegulatoryCompliance for latest insights on regulatory remediation and compliance transformation.

 

References:

  1. “Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and the Council as regards International Financial Reporting Standard 9,” Official Journal of the European Union, November 29, 2016. Access at:
    Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 (Text with EEA relevance)
  2. “Solvency II: internal models – assessment, model change and the role of non-executive directors – SS17/16,” Prudential Regulation Authority, November 25, 2016. Access at:
    Solvency II: Internal models – assessment, model change and the role of non-executive directors
  3. “Commission Delegated Regulation (EU) 2016/1904 of 14 July 2016 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council with regard to product intervention,” Official Journal of the European Union, October 29, 2016. Access at:
    Commission Delegated Regulation (EU) 2016/1904 of 14 July 2016 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council with regard to product intervention
  1. “Solvency II: Monitoring model drift and standard formula SCR reporting for firms with an approved internal model – SS15/16,” Prudential Regulation Authority, October 25, 2016. Access at: Solvency II: Monitoring model drift and standard formula SCR reporting for firms with an approved internal model
  1. “Insurance Europe comments on the need to modernize VAT rules for financial services,” Insurance Europe, Position Paper, November 30, 2016. Access at:Comments on the need to modernise VAT rules for financial services
  2. “Response to European Commission communication on the call for evidence: More ambition required to boost EU economic growth,” Insurance Europe, Press Release, November 23, 2016. Access at: Response to European Commission communication on the call for evidence: More ambition required to boost EU economic growth
  3. “Call for Evidence: A roadmap for fine-tuning rules for financial services to support growth and investment,”European Commission, Fact Sheet, November 23, 2016. Access at: Call for Evidence: A roadmap for fine-tuning rules for financial services to support growth and investment
  4. “Treasury Select Committee Inquiry into Solvency II, Summary response from Association of British Insurers,” Association of British Insurers, November 11, 2016. Access at: Treasury select committee inquiry into Solvency II summary response from Association of British Insurers
  1. “FinCEN issues Advisory to Financial Institutions on Cyber-Events and Cyber-Enabled Crime,” Financial Crimes Enforcement Network (FinCEN), October 25, 2016. Access at:FinCEN issues advisory to financial institutions on cyber-events and cyber-enabled crime
  2. Opinion on the digitization of operations for insurance firms, Belgian Financial Services and Markets Authority, November 16, 2016. Access at: On the bill to amend the Law of 4 April 2014 on insurance with a view to adjusting to the digitisation of operations
  3. “Solvency II: Reporting of National Specific Templates – CP37/16 UPDATED,” Prudential Regulation Authority, November 16, 2016. Access at:
    Solvency II: Reporting of National Specific Templates – CP37/16 UPDATED
  4. “The European Commission invites European Supervisory Authorities to amend PRIIPs rules and develop guidance,” European Insurance and Occupational Pensions Authority, November 11, 2016. Access at: The European Commission invites European Supervisory Authorities to amend PRIIPs rules and develop guidance
  5. “European Commission sets up an internal Task Force on Financial Technology,” European Commission, November 14, 2016. Access at: European Commission sets up an internal task Force on financial technology
  6. “Cyber insurance underwriting risk – CP39/16,” Prudential Regulation Authority, November 14, 2016. Access at: Cyber insurance underwriting risk
  7. “Application Paper on Approahes to Supervising the Conduct of Intermediaries,” International Association of Insurance Supervisors, November 15, 2016. Access at: Publication of application paper on approaches to supervising the conduct of intermediaries
  8. “The FINMA defines its strategic goals for 2017 to 2020” Swiss Financial Market Supervisory Authority, November 16, 2016. Access at FINMA defines its strategic goals for 2017 to 2020
  9. “Consultation on Risk-based Global Insurance Capital Standard (ICS) Version 1.0 Public Consultation Document,” International Association of Insurance Supervisors, Public Consultation, November 01, 2016. Access at: Response to consultation on Risk-based Global Insurance Capital Standard Version 1.0
  10. “Commission extends the application date of the PRIIPs Regulation by one year.” European Commission, November 9, 2016. Access at: Commission extends the application date of the PRIIPs Regulation by one year
  11. “Response to EIOPA consultation on draft ITS on a standardised format of the IPID,” Insurance Europe, Position Paper, October 27, 2016. Access at: Response to EIOPA consultation on draft ITS on a standardised format of the IPID
  12. “GDPR Key Implementaion Concerns – July 2016,” Association of British Insurers, October 20, 2016. Access at: GDPR Key Implementations
  13. “Treasury’s Federal Insurance Office Releases First Annual Consumer Report,” U.S. Department of the Treasury, November 21, 2016. Access at: Treasury’s Federal Insurance Office releases first annual consumer report
  14. “2016 list of global systemically important insurers (G-SIIs).” Financial Stability Board, November 21, 2016. Access at: 2016 list of global systemically important insurers (G-SIIs)
  15. “Financial Stability Board agrees 2017 workplan,” Financial Stability Board, November 17, 2016. Access at: Financial Stability Board agrees 2017 workplan 
  16.  “Address by Bernard Sheridan, Director of Consumer Protection, at the FinCoNet AGM 2016.” Central Bank of Ireland, November 15, 2016. Access at: Consumer Protection and Fintech – Role of the Supervisory Authority

About the Insurance Monthly Regulatory Tracker

The “Insurance Regulatory Insights” newsletter is the monthly initiative aimed at updating the Finance and Risk community with the most recent regulatory changes impacting insurance firms. We update our comprehensive regulatory database every month by tracking more than 40 regulatory and industry bodies covering North America, Europe and Asia Pacific. Every month, we will highlight approximately 10 regulations shortlisted on the basis of geography of coverage and anticipated business impacts. Our summaries highlight the Regulation Type and business processes affected by the regulatory reforms. This newsletter is planned to supplement the existing newsletter “Regulatory Insights” which provides a deeper analysis of business implications and Accenture’s point of view on a single or much smaller set of regulatory changes.

Disclaimer

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