EIOPA sharpens Solvency II: liquidity in focus, macroprudential muscle flexed
This month the European Insurance and Occupational Pensions Authority (EIOPA) made two updates to insurance supervision, submitting two regulatory technical standards (RTS) to the European Commission. These standards bring substance and structure to new macroprudential tools introduced under the revised Solvency II regime.
Central to the update are Liquidity Risk Management Plans (LRMPs), designed to make sure insurers can stay liquid even in choppy waters. Firms with over €20 billion in assets will be required to perform in-depth, medium- and long-term liquidity assessments. Supervisors have discretion to opt smaller firms in or out, depending on their risk profile; a risk-based, proportional approach that aims to balance robustness and flexibility.
The second RTS makes macroprudential analysis a permanent fixture in risk management, requiring selected insurers to embed systemic risk assessments directly into their Own Risk and Solvency Assessments (ORSA). A combination of micro-level oversight with macroprudential forecasting.
Explore the full details here.
