‘No need for separate COVID-19 supervisory statement for the ORSA' – Insurance Europe

Written by Adam Cadle

15/03/2021

Insurance Europe has said there is “no need” for a separate COVID-19 supervisory statement regarding the own risk and solvency assessment (ORSA).

In its response to a consultation by EIOPA on proposals to develop a statement, Insurance Europe argued that despite COVID-19 having “serious effects on economies”, the pandemic “is not a new risk in itself”.

“Rather, the pandemic affects the various risks to which insurers are already exposed: eg equity risk. Consequently, insurers should assess the impact on existing risks, and/or identify and assess any additional risk to which an insurer has become exposed due to the pandemic.”

Insurance Europe added: “It should also be stressed that decisions on the content and methods used, and the level of detail included in ORSA reports, are the sole responsibility of the insurer. General requirements from EIOPA would counteract this and should be viewed very critically.

“Moreover, the suggested approach would not help insurers. It may, in fact, have the opposite effect, insofar as that ‘convergence’ of supervisory guidance may lead to ORSAs not taking into account an insurer’s specific risk profile, as the focus will be to comply with supervisory guidance. As such, the effect would be a changed focus, away from other significant risks specific to the insurer."

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