Insurance & Private Pension Law Update, Issue No. 23 - July
2011
EIOPA publishes Second European Insurance Stress Tests
Results
European insurers were given a clean bill of health following
European-wide stress tests carried out by EIOPA.
The stress tests show the effect of the new Solvency II rules on
the capital of insurance undertakings in various scenarios.
Of note, 10% of insurance undertakings and groups surveyed
showed a breach of their Minimum Capital Requirements
('MCR') in the adverse scenario while 8% of undertakings
breach their MCR in an inflation scenario.
Following recent international developments, EIOPA decided to
include a sovereign debt exposure scenario in a separate test. The
results of the test show that 5% of the undertakings would be
unable to satisfy MCR requirements should adverse conditions in the
sovereign debt market occur.
