The European Insurance and Occupational Pensions Authority (EIOPA) will extend the deadline of the holistic impact assessment for the 2020 Solvency II Review by two months, to 1 June 2020.
EIOPA revealed that in the coming days, it will communicate further details on postponing additional reporting and information requirements.
The authority highlighted that it is “increasingly clear” that the COVID-19 outbreak is having “significant consequences for the global economy, including financial services”.
Additionally, it explained that insurers are likely to face progressively difficult conditions in the immediate future, both in terms of navigating challenging market conditions and in maintaining operations, while taking steps to protect employees and customers.
In the announcement, EIOPA said: “Recent stress tests have shown that the sector is well capitalised and able to withhold severe but plausible shocks to the system.”
The Solvency II framework includes a number of tools that can be used to mitigate risks and impacts to the sector.
Additionally, EIOPA stated that along with national competent authorities, these tools are ready to be implemented “if and when necessary” to ensure that policyholders remain protected and financial stability is safeguarded.
EIOPA warned that insurance companies should take measures to preserve their capital position in balance with the protection of the insured, following prudent dividend and other distribution policies, including variable remuneration.
It added: “Notwithstanding existing tools and powers, and together with national authorities and the other European Supervisory Authorities and the European Systemic Risk Board, EIOPA will continue to monitor the situation and will take or propose to EU institutions any measure necessary in order to mitigate the impact of market volatility to the stability of the insurance sector in Europe and safeguard the protection of policyholders.”