EIOPA has officially launched its 2021 Insurance Stress Test.
As members are already aware, the 2021 exercise focuses on a prolonged COVID-19 scenario in a “lower for longer” interest rate environment and will evaluate both the impact on the capital and the liquidity position of the undertakings in scope.
EIOPA has noted the key objectives of the 2021 stress test to be:
- To assess the resilience of participants to adverse scenarios from a capital and liquidity perspective;
- To consider possible recommendations to the industry and to allow supervisors to engage with insurers on potential remedial actions;
- To complement the microprudential assessment with the estimation of potential spill-over from the insurance sector triggered by widespread reactions to the prescribed shocks.
EIOPA is now carrying out a Question and Answers process to provide further clarifications to participants.
Participating undertakings have to submit the results of the exercise to their NSAs by 10 August and the results of the exercise are planned to be published in December 2021.
Insurance Europe