EIOPA has set out its expectations on insurers as they try to manage the risks Covid-19 presents. Its key messages are:
- the importance of business continuity. It says regulators can help by being flexible on supervisory reporting and public disclosure for the end of 2019. EIOPA commits to limiting requests for information and consultations to what is essential for proper market monitoring and has extended the deadline of the Holistic Impact Assessment for the 2020 Solvency II Review to 1 June; and
- the Solvency II risk-based Solvency Capital Requirement should allow insurers to absorb significant losses, and there is also an inbuilt supervisory intervention regime. Recent stress tests have shown the sector should be able to withstand “severe but plausible” shocks, but EIOPA and national regulators will be ready to use supervisory tools if required. That said, insurers should take measures, including prudent distribution and variable remuneration, to preserve their capital position and protect insureds;