The technical specifications for the long-term guarantees impact assessment (LTGA) will be published on the same day the exercise itself is due to start, leading to concerns that many firms will struggle to participate.
The European Insurance and Occupational Pensions Authority (EIOPA) has confirmed that the specifications providing the detailed information on how the long-term guarantees package will be tested will be published on January 28. Experts fear the late publication of the specifications, which will cover the counter-cyclical premium, matching adjustment and extrapolation of the risk-free rate, could hamper insurers' ability to take part in the test.
The simultaneous launch of the technical specifications and the commencement of LTGA itself will put pressure on firms already burdened with year-end reporting requirements. As insurers have their resources stretched, there will likely be a qualitative impact on the assessment's outcome, says Coatesworth [consulting actuary at Milliman in London]. Insurers are expected to submit results by the end of March 2013.
The problem could be worsened if, like part one of the technical specifications that were published in October, a revised version is published weeks after the original, which changes key requirements. This could produce irregular results across the industry. It also is unclear whether any guidance notes will be provided by EIOPA to assist firms and help ensure the results are reported consistently.
Insurers have been lobbying for more time to undertake the assessment, or for it to be postponed until the end of the annual reporting cycle. However, EIOPA has resisted as it needs to publish its report on the results in June before the European Parliament votes on Omnibus II on June 10.
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