EIOPA-BoS-15/106 HR

EUROPEAN INSURANCE
AND OCCUPATIONAL PENSIONS AUTHORITY

Guidelines on methods for determining market shares for reporting purposes

EIOPA – Westhafen Tower, Westhafenplatz 1 - 60327 Frankfurt – Germany - Tel. + 49 69-951119-20; Fax. + 49 69-951119-19; email: info@eiopa.europa.eu site: https://eiopa.europa.eu/

1. Introduction

1.1. In accordance with Article 16 of Regulation (EU) No 1094/2010 of the European Parliament and of the Council (hereinafter the “EIOPA Regulation”)1 EIOPA issues Guidelines on how to determine market shares for the limited regular reporting as required by Article 35(11) of Directive 2009/138/EC of the European Parliament and of the Council (hereinafter “Solvency II Directive”)2 .

1.2. The purpose of these Guidelines is to specify the methods used when determining the market shares referred to in Article 35(6) and (7) and Article 254 of the Solvency II Directive.

1.3. These Guidelines define the market shares relating to 100 % of the markets supervised by each national competent authority under the Solvency II Directive.

1.4. In order to calculate the market share, importance is given to the type of business, that is life and non-life insurance, and not to the authorisation granted to undertakings, that is authorisation for life insurance or authorisation for non-life insurance.

1.5. The specific situation of composite undertakings and the reinsurance market was considered due to the possible complexity of the risk profile. EIOPA considers that attention should be paid to this when considering the criteria set out in Article 35(8) of the Solvency II Directive.

1.6. In Member States where there is a large volume of reinsurance activity, including such activity in the market share may lead to different exemptions than if four different market shares were considered, two for direct insurance activity (life and non-life) and two for reinsurance activity (life and non-life). However, since national competent authorities apply Article 35(8) of the Solvency II Directive, it is more likely that there could be more situations in which undertakings would have to report due to distortion resulting from the inclusion of reinsurance activity in market shares.

1.7. The business carried out by insurance and reinsurance undertakings through their branches (within and outside the EEA) and under the freedom to provide services should be taken into account in the relevant market shares of the country in which the undertaking is located.

1.8. Exempted insurance and reinsurance undertakings should be aware that they might have to report in the future due to changes in the annual recalculated market shares, even if the volume of their business remains unchanged.

1.9. These Guidelines are addressed to national competent authorities under the Solvency II Directive.

[1] Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48.)

[2] Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1.)

1.10. The Guidelines apply from 1 January 2016.

1.11. If not defined in these Guidelines, terms have the meanings defined in the legal documents mentioned in the introduction.

Guideline 1 – Scope of the market

1.12. National competent authorities should ensure that the market share:

a) includes the business carried out by all insurance and reinsurance undertakings established in accordance with Article 2 of the Solvency II Directive;

b) does not include the business carried out by insurance and reinsurance undertakings that meet the criteria of Article 4 of the Solvency II Directive.

Guideline 2 – Calculation of the life insurance market

1.13. National competent authorities should ensure that the life insurance market and the reinsurance market are determined on an annual basis, by adding up the amounts of gross technical provisions for life insurance business, including technical provisions for insurance linked to indices and units in investment funds, of the relevant insurance and reinsurance undertakings referred to in Guideline 1.

Guideline 3 – Calculation of the non-life insurance market

1.14. National competent authorities should ensure that the non-life insurance and reinsurance market is determined on an annual basis, by adding up the amounts of gross premiums charged for non-life insurance of the relevant insurance and reinsurance undertakings referred to in Guideline 1.

Guideline 4 – Inclusion in the market of the business of insurance and reinsurance undertakings with a financial year different from the end of the calendar year

1.15. If an insurance or reinsurance undertaking has a financial year different from the calendar year, national competent authorities should ensure that the most recent available annual information is taken into account when calculating the non-life insurance market or the life insurance market.

Guideline 5 – Treatment of insurance and reinsurance undertakings that meet the obligation for life and non-life insurance

1.16. National competent authorities should ensure that an insurance or reinsurance undertaking operating in both the non-life and the life insurance market is not exempted if its business is above the threshold of 20 % in one of the market shares.

Guideline 6 – Information to be used for determining the market

1.17. National competent authorities should, to the greatest extent possible, take into account the most recent annual information available from the solvency regime previously in force in order to apply Guidelines 1 to 5 for the first and second years of application of the Solvency II Directive.

1.18. National competent authorities should consider the data reported in the annual quantitative reporting templates S.05.01 and S.12.01 as defined in the Implementing Technical Standards for supervisory reporting3 in the third year and subsequent years of application of the Solvency II Directive.

Guideline 7 - Informing undertakings

1.19. National competent authorities should inform insurance or reinsurance undertakings within a reasonable timeframe that they have been granted an exemption from quarterly reporting or annual item-by-item reporting.

Guideline 8 – Informing undertakings that are part of a group

1.20. National competent authorities should inform insurance or reinsurance undertakings that are part of a group of the process, including the timeframe, to demonstrate to the satisfaction of the supervisory authority that quarterly reporting or item-by-item reporting is not appropriate, given the nature, scale and complexity of the risks inherent in the group's business and taking into account the objective of financial stability.

Guideline 9 - Consultation with the group supervisor

1.21. When assessing the exemption requests of insurance or reinsurance undertakings that are part of a group, national competent authorities should take into account the opinion of the group supervisor.

[3] The discussion paper on the ITS reporting, including templates, is available on the following website: https://eiopa.europa.eu/Pages/Consultations/Public-consultation-on-the-Set-2-of-the-Solvency-II-Implementing-Technical-Standards-(ITS)-and-Guidelines.aspx

Compliance and reporting rules

1.22. This document contains guidelines issued under Article 16 of the EIOPA Regulation. In accordance with Article 16(3) of the EIOPA Regulation, competent authorities and financial institutions shall make every effort to comply with the guidelines and recommendations.

1.23. Competent authorities that comply or intend to comply with these guidelines should incorporate them into their regulatory or supervisory framework in an appropriate manner.

1.24. Competent authorities shall confirm to EIOPA whether they comply or intend to comply with these guidelines, with reasons for non-compliance, within two months of the issuance of the translated versions.

1.25. In the event that competent authorities do not submit a response within the specified timeframe, they shall be deemed non-compliant with the reporting and shall be reported as such.

Final provision on reviews

1.26. These guidelines are subject to review by EIOPA.