Pillar 2 of Solvency II sets out the qualitative requirements that insurers must meet at both individual and group level.
Aiming to safeguard adequate risk management and governance, the Pillar 2 provisions are related mainly to the system of governance, including the own risk and solvency assessment (ORSA). The requirements are closely aligned with the provisions of the Financial Supervision Act (Wft) governing sound and ethical operational management. They cover insurers’ organisations and their operational management in general, the expertise and trustworthiness of their directors and key officers, their risk management, internal control, key functions and outsourcing. ORSA forms part of the risk management system and focusses on insurers’ own assessment of the risks they run and their associated capital needs.
On 27 September 2013 the European Insurance and Occupational Pensions Authority (EIOPA) adopted and issued Preparatory Guidelines for Solvency II, including Guidelines on the System of Governance and ORSA. DNB applies these Guidelines in its supervision of insurers in preparation for Solvency II.
Liability-Driven Investment funds (LDI funds) mainly invest in long-term government bonds and long-term interest rate derivatives. The use of these interest rate derivatives exposes LDI funds to liquidity risks in case of large interest rate fluctuations.
Read more Limited liquidity risks in Euro LDI funds
This week, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have published their final reports on greenwashing in the financial sector.
Read more European Supervisory Authorities publish reports on greenwashing in the financial sector
On Tuesday 28th May from 3:00-4:45 PM CET DNB will organize an online information session about fit and proper assessments.
Read more Information session about fit and proper assessments DNB
The rapid development of artificial intelligence (AI) poses challenges for the supervisory work of the AFM and DNB. The supervisory authorities have published a report with criteria and areas of attention for shaping the supervision of AI.
Read more AFM and DNB publish report on the impact of AI on the financial sector and supervision
