EIOPA launches EU-wide Insurance Stress Test

The European Insurance and Occupational Pensions Authority (EIOPA) launched
today an EU-wide stress test for the insurance sector.

The test package comprises two modules. The core module of the exercise
includes two adverse market scenarios, covering financial asset stresses
(sovereigns, corporate bonds and equities) as well, as shocks to real
estate assets prices' and interest rates stresses. The adverse market
scenarios are complemented by a set of independent insurance-specific
shocks covering mortality, longevity, insufficient reserves and
catastrophe shocks. The second module addresses the impact of a low yield
environment and is a follow-up to EIOPA's Opinion on Supervisory
Response to a Prolonged Low Interest Rate Environment. The adverse market
scenarios have been developed in cooperation with the European Systemic
Risk Board (ESRB).

It is envisaged that the stress test will cover at least 50% of the market
share in each country both of life and non-life segments. Its results will
provide a clear vision on the resilience of the insurance sector to
different shocks and identify issues that require further supervisory
response.

The technical basis of the stress test is the new insurance regulatory
regime Solvency II, which will apply as of 1 January 2016. Simultaneous
with the launch of the exercise, EIOPA publishes the Solvency II Technical
Specifications for the preparatory phase that will provide a ground for
undertakings to value assets and liabilities and to calculate
solvency/minimum capital requirements and own funds.

The exercise will be run in close cooperation with national supervisory
authorities (NSAs). The NSAs will collect data from undertakings in July
2014 and validate the information before it is aggregated at the EU level.
To improve consistency in the calculations, during August and September
2014, EIOPA in cooperation with NSAs will conduct an EU-wide validation of
the data received. Results of the stress test analysis will be disclosed
in November 2014.

To facilitate the participation of undertakings in the exercise EIOPA will
hold a workshop and will launch a Q&A tool to address queries raised by
participants when completing the test.

Click here (Link:
https://eiopa.europa.eu/activities/financial-stability/insurance-stress-test-2014/index.html
)to access the Insurance Stress Test 2014.


This newsletter was sent to you by:

EIOPA
WesthafenTower | Westhafenplatz 1 | 60327 Frankfurt | Germany
Phone: +49 69 951119-20
Fax: +49 69 951119-19

info@eiopa.europa.eu
https://eiopa.europa.eu

---

Don't want to receive this newsletter anymore?

Please login to the Restricted Area of the EIOPA website and change
your user profile:

https://eiopa.europa.eu/restricted-area/index.html

If you forgot your password, you will find a link to receive a new
password on the login page of the EIOPA Restricted Area.