Japan’s temporary equivalence with respect to reinsurance granted by the European Commission is scheduled to expire on 31 December 2020, in accordance with the Solvency II Directive.
The announcement was made in a joint statement from the Financial Services Agency (FSA), the European Commission and the European Insurance and Occupational Pensions Authority (EIOPA).
The expiration is due to the different timelines for the termination of the status of temporary equivalence under the Solvency II Directive and the future implementation of Japan’s economic value-based solvency regime, respectively.
But the statement from FSA, EC and EIOPA highlighted that the decision does not relate to an assessment of the quality of supervision in Japan.
It was affirmed that regulatory cooperation between the EU and Japan for the insurance sector remains strong. The authorities on both sides will further enhance supervisory cooperation.
In order to further enhance the relationship between the EU and Japan, the European Commission, EIOPA and the FSA explained that it will maintain close communication and discussions that include the enhancement of supervisory cooperation, “with a view to ensuring the continuity of the quality of the supervision of cross-border groups by their respective authorities”.
Cooperation will also be strengthened through exchanges supporting the regulatory developments on both markets, which the EU suggested may potentially lead to a future assessment for full equivalence as established under Solvency II.
The EC EIOPA and the FSA have been cooperating closely on regulatory and supervisory matters over the years.
The joint statement said: “Our strong cooperation has been built on a number of close exchanges and dialogues related to the developments in the respective insurance markets as well as the global insurance market.”
These issues were discussed on 20 November 2020 at the second meeting of the joint EU-Japan financial regulatory forum established under the Japan-EU Economic Partnership Agreement.
