EIOPA LAUNCHES THE LONG-TERM GUARANTEE ASSESSMENT

The European Insurance and Occupational Pensions Authority (EIOPA) launched
on 28 January 2013 a technical assessment of the long-term guarantee (LTG)
package agreed by the Trilogue parties (the European Parliament, the
Council of the EU and the European Commission) in the context of the
Omnibus II Directive negotiations. Its aim is to test various options
contained in the Solvency II LTG measures in order to assess the effects
that the implementation of such measures may have on: policyholders and
beneficiaries, insurance and reinsurance undertakings, supervisory
authorities and the financial system as a whole.

The assessment will focus on the evaluation of the following key features
(individually and in combination): adapted relevant risk-free interest
rate term structure ("Counter-cyclical Premium"); extrapolation;
matching adjustment ("Classic" and "Extended"); transitional
measures; and extension of the "Recovery Period".

In providing quantitative data for the purposes of this assessment,
insurance undertakings should follow the Technical Specifications
published today by EIOPA:

https://eiopa.europa.eu/consultations/qis/insurance/long-term-guarantees-assessment/index.html
(Link:
https://eiopa.europa.eu/consultations/qis/insurance/long-term-guarantees-assessment/index.html
)

Insurance undertakings will have until 31 March 2013 to carry out their
estimation of the impact of the measures covered in the LTGA. In the
course of April and May the data submitted by insurance undertakings will,
first, be validated by the national competent authorities (NCAs) and,
then, be analysed by EIOPA at the EU level. The report presenting the
technical results of the LTGA exercise together with EIOPA's conclusions
is planned to be published in the second half of June 2013.

The assessment covers life as well as non-life insurance companies in the
different national markets. The sample captures a range of undertakings of
diverse size and nature.

Gabriel Bernardino, Chairman of EIOPA, said: "EIOPA's independent
supervisory assessment will provide a reliable basis for an informed
political decision on the long term guarantee measures to be included in
Solvency II. It is essential for policyholder protection and financial
stability that Solvency II appropriately reflects the long term financial
position and risk exposure of insurance and reinsurance undertakings
carrying out insurance business of a long-term nature."


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