Where Now For Long-Term Guarantees And Solvency II?

On 14 June 2013, EIOPA published its report setting out its technical findings on the Long-term Guarantees Assessment (LTGA). This report was eagerly awaited as it is one of the key steps in a succession of events leading to the implementation of Solvency II. In this Insights, we consider the implications of the assessment for insurance companies and the wider path to Solvency II.

Summary of EIOPA's report

Solvency II is designed to be risk-sensitive and, as a result, solvency positions will vary under different economic conditions, which was observed in the LTGA results. While EIOPA recommends some changes, their overall conclusion is that most of the measures proposed under the LTGA are generally appropriate.