The recovery of the European economy — combined with moves by regulators to free up potential sources of return — is leading to a paradigm shift in asset allocation. But conflicting regulatory regimes could curtail some of the opportunity, sources said.
European pension funds’ investing patterns are beginning to change, thanks to a lifting of asset allocation restrictions across the Continent that is coinciding with the long-awaited recovery in the European economy and a changing global interest rate environment.
The global financial crisis left asset owners in Europe with no appetite for more volatile asset classes.
And European pension funds historically were heavily invested in fixed-income instruments.
Continue Reading “European growth, regulatory changes drive asset moves” at Pensions & Investments
This announcement is in response to a European Insurance and Occupational Pensions Authority (EIOPA) consultation on the potential harmonisation of frameworks for insurers.
The lobby group said in its position paper that Solvency II already allows early intervention when either the Minimum Capital Requirement (MCR), or the Solvency Capital Requirement (SCR) are breached, and that this is sufficient.
It states: “Insurance Europe believes it is important to reiterate that Solvency II already provides several safeguards that…
Continue Reading “Solvency II means no need for new EU insurance framework” at The Actuary
After almost two years of negotiation, the revised European Union Directive on the Activities and Supervision of Institutions for Occupational Retirement Provision (IORP II) comes into effect today.
Member States will now have two years to incorporate it into national law.
But what is IORP II? How will it impact on occupational pension provision in the UK? And what about the elephant in room – Brexit?
IORP I came into effect in 2003, and lays down rules for activities carried out by IORPs (which, in the UK, are broadly employer-funded occupational pension schemes).
Continue Reading “Pensions: IORP II and the elephant in the room” at Lexology
Sammy Cooper-Smith, co-head of business development, David Land, chief investment officer, and Graham Butcher, chief underwriting officer at Rothesay Life – named insurer of the year at the Buy-Side Awards 2016 – expect de-risking and buyout volumes to soar in the new year.
What are your expectations for the pensions de-risking market in 2017?
Rothesay Life: It looks as if it will be a busy year, with volumes – excluding insurer-to-insurer deals – surpassing those of 2016.
Buyout volumes specifically, as in the full settlement of schemes, should be higher as we see a continued desire for sponsoring employers to settle a liability they have little control over and remove volatility from their balance sheets.
Continue Reading “Great expectations: The pensions market in 2017” at Risk.net
The FINANCIAL — The euro area banking sector consolidated further in 2015, according to the ECB’s 2016 Report on Financial Structures, which is published on October 27.
The report also finds that banks’ capital ratios improved and that non-performing loan (NPL) ratios fell across the sector for the first time since the financial crisis, although they remained persistently high or increased further in some countries.
The report finds that banking sector consolidation in 2015 was driven by continued pressure to contain costs, deleverage and restructure. The number of credit institutions in the euro area declined to 5,475 at the end of 2015, from 5,614 at the end of 2014.
Continue Reading “Report on financial structures details structural changes in the euro area financial sector ” at The Financial News
1 EU – IORP II text finalised – The new IORP Directive has now been finalised and is expected to come into force by the end of this year. EU Member States will have two years to implement the directive, which contains new governance and disclosure requirements, relaxes the funding requirements for cross-border schemes and increases member protection on cross-border transfers. It is possible that these requirements will still be implemented in the UK despite Brexit.
Action: Review the new requirements and consider the implications for your plan. Read more.
2 France – Supplementary pensions could be exempt from Solvency II – The government is proposing to exempt supplementary pensions from Solvency II capital requirements under a new omnibus bill, Sapin II. To achieve this, insurers will be permitted to transfer supplementary pensions into a new legal entity, which will take the form of an institution for occupational retirement provision (IORP). According to official estimates, 130bn of assets should be eligible for this.
Continue Reading “Update from our European experts – European Pensions Agenda” at Lexology
PensionsEurope has responded to Norwegian plans to introduce solvency capital requirements for pension funds to reiterate warnings on the detrimental effect of such requirements and again point to IORP II statements against the further development of solvency models for pension funds.
Commenting on Norwegian government plans to introduce a simplified Solvency II requirement for pension funds in January 2018, the umbrella association for national workplace pension bodies warned against solvency capital requirements for pension funds – be they at national or EU level – as they would have significant negative consequences.
Continue Reading “PensionsEurope seizes on Norway plan to warn against solvency rules” at IPE Investment & Pensions Europe
The European Insurance and Occupational Pensions Authority (EIOPA) has published a work plan outlining the strategic direction of its activities over the next three years, from 2017 to 2019.
The strategy is set out in a single programming document (SPD), developed in accordance with European Commission requirements to enhance consistency and comparability across European Union bodies.
The SPD specifies the tasks EIOPA is mandated, and required, to undertake, as well as its strategic objectives and pensipriorities for 2017.
Continue Reading “EIOPA sets out strategic direction of activities for next three years” at The Actuary News
The European Insurance and Occupational Pensions Authority (EIOPA
) published today an updated technical documentation on the methodology to derive the risk-free interest rate term structures (RFR) for Solvency II
The changes were required in the following areas:
- The update of the representative portfolios to calculate the volatility adjustments (VA) on the basis of more up-to-date and granular data on the investments of the European (re)insurance companies. This update was announced on 1 July 2016, see here.
- The peer country for Cypriote government bond yields used for the calculation of the volatility adjustments and the fundamental spread was changed from Greece to Portugal.
Continue Reading “EIOPA publishes updated technical methodology documentation for risk-free interest rate term structures for Solvency II” at EIOPA