submission of Information to the Central Bank Under Solvency II

Transcription

1 October 2015 Policy Notice October 2015 Discretions and Options on Submission of Information to the Central Bank under Solvency II 1

2 1.0 Background 1.1 This Notice specifies Central Bank of Ireland (hereafter Central Bank ) requirements and guidance in relation to the implementation of discretions and options arising under the Solvency II Directive 1, the Delegated Regulation 2, the draft Implementing Technical Standards (ITS) on templates for the submission of information to the supervisory authorities and the draft ITS on the procedures, formats and templates of the Solvency and Financial Condition Report This Notice does not offer an exhaustive account of all discretions or options under the Solvency II Directive and relevant Regulations. Further Notices will be issued by the Central Bank in due course. 1.3 The Central Bank may periodically update elements of this Notice over time to reflect changes in Central Bank policy, the transposition of the Solvency II Directive, the finalisation of Commission Delegated Regulations or other developments stemming from, inter alia, changes to EU Regulations. 1.4 This Notice is applicable to all insurance and reinsurance undertakings within the scope of Solvency II, as well as insurance and reinsurance groups of which the Central Bank is the group supervisor. 1.5 This Notice is structured as follows: Section 2 outlines the Central Bank s policy in respect of the exercise of a discretion with respect to exemptions from Solvency II quarterly supervisory reporting; Section 3 outlines the Central Bank s policy in respect of the exercise of a discretion with respect to the currency in which insurance and reinsurance undertakings and groups subject to group supervision under Solvency II must prepare and submit their Solvency II supervisory reports; Section 4 outlines the Central Bank s policy in respect of the exercise of a discretion with respect to the exchange rate that must be used when converting assets and liabilities into the reporting currency for the purposes of Solvency II regulatory reporting. 1 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (as amended) 2 Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance 3 As submitted to the European Commission on 6 th July 2015 (and as amended and including technical annexes): 1

3 2. Exemptions from Solvency II quarterly regulatory reporting 2.1 In accordance with Articles 35 and 254 of the Solvency II Directive and Articles 304 and 372 of the Delegated Regulation, insurance and reinsurance undertakings, as well as participating insurance or reinsurance undertakings, insurance holding companies and mixed financial holding companies, are required to submit quantitative templates on a regular basis to the Central Bank. These templates are defined in the draft Commission Implementing Regulations on the templates for the submission of information to the supervisory authorities. 2.2 Article 35(6) of the Solvency II Directive gives supervisory authorities discretion to limit quarterly supervisory reporting where the submission of that information would be overly burdensome in relation to the nature, scale and complexity of the risks inherent in the business of the undertaking and where the information is reported at least annually. The Central Bank has decided to exercise this discretion. 2.3 Unless otherwise informed by the Central Bank, all insurance and reinsurance undertakings with a Low impact PRISM rating as at 31 December 2014 are hereby exempted from submitting the following templates on a quarterly basis, in relation to any quarter ended between 1 January 2016 and 31 December 2016: S Collective investment undertakings - look-through approach S Derivatives transactions 2.4 Unless otherwise informed by the Central Bank, all Life insurance undertakings with a Medium-Low impact PRISM rating as at 31 December 2014 are hereby exempted from submitting the following template on a quarterly basis, in relation to any quarter ended between 1 January 2016 and 31 December 2016: S Collective investment undertakings - look-through approach 2.5 The exemption described in paragraphs 2.3 and 2.4 is valid only in relation to Solvency II quarterly quantitative templates due in respect of any quarter ended between 01/01/2016 and 31/12/ All undertakings to whom these exemptions will not apply, will be notified by the Central Bank by the 13 November

4 3. Solvency II reporting currency 3.1 Article 1 of the draft ITS on the templates for the submission of information to the supervisory authorities and of the draft ITS on the procedures, formats and templates of the Solvency and Financial Condition Report gives discretion to supervisory authorities to require insurance and reinsurance undertakings and groups to prepare their Solvency II supervisory reports in a currency other than that used to prepare their financial statements. 3.2 The Central Bank will not exercise the discretion available under Article 1 described in paragraph 3.1. Therefore, insurance and reinsurance undertakings must prepare and submit to the Central Bank their Solvency II supervisory reports, including the Regular Supervisory Report, SFCR and the annual and quarterly quantitative templates, in the currency used to prepare their statutory financial statements Participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies at the head of a group supervised by the Central Bank must prepare and submit their Solvency II group supervisory reports in the currency used to prepare the consolidated financial statements. 4 These are the financial statement filed with the Companies Registration Office 3

5 4. Exchange rates 4.1 Article 3(4) of the draft ITS on the templates for the submission of information to the supervisory authorities and of the draft ITS on the procedures, formats and templates of the Solvency and Financial Condition Report gives discretion to supervisory authorities to require insurance and reinsurance undertakings, as well as participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies, to use a different exchange rate from that used to prepare their statutory financial statements or consolidated financial statements, for the purposes of Solvency II regular supervisory reporting. 4.2 The Central Bank will not exercise the discretion available under Article 3(4) described in paragraph 4.1. Therefore, insurance and reinsurance undertakings must use the exchange rate used to prepare their statutory financial statements. 4.3 Participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies must use the exchange rate used to prepare the group s consolidated financial statements. 4.4 Where consolidated financial statements are not produced, participating insurance and reinsurance undertakings, insurance holding companies and mixed financial holding companies must discuss and agree with their supervisor the currency and the exchange rate to be used for Solvency II regular supervisory reporting. 4

6 PO. Box No 559, Dame Street, Dublin 2, Ireland 5