KPMG updates
Insurance Accounting Advisory Quarterly
Whether you are a (re)insurer reporting under UK/Irish Generally Accepted Accounting Practice (UK/Irish GAAP) or International Financial Reporting Standards (IFRS) there are forthcoming changes under each financial reporting framework that may have an impact on your entity.
In this article, Niall Naughton (Partner, Financial Services) and Aoife O’Brien (Director, Actuarial) focus on some of the key changes under each framework.
Risk culture: A balancing act
In this article, the KPMG Risk Consulting team (Gillian Kelly, (Partner, Consulting) and Shane Garahy (Partner Risk Consulting)) examine the topic of risk culture, with a focus on the steps firms can take to strengthen their position in response to the latest regulatory requirements.
KPMG Economic Outlook
The KPMG Economic Outlook (authored by Daragh McGreal, (KPMG Director and Head of Strategic Economics) for the global and Irish economies shows that, despite clear global geopolitical risks, economic growth will be realised in 2025.
Ireland experienced growth in its domestic economy in 2024 due to record employment of 2.8 million and bumper tax revenues of €108 billion.
However, 2025 begins with significant uncertainty, with US threats of tariff, re-shoring manufacturing, and potential changes in direction of global fiscal policy clouding the outlook.
Global tech report: Financial services insights
As financial services organisations contend with evolving risks and demands in a cost-pressured environment, companies with a competitive edge in the sector are those who can deploy digital transformation tactics to bring enterprise-wide value.
Owen Lewis (KPMG Partner and Head of Management Consulting) and Ian Nelson (Head of Financial Services and Regulatory) discuss whether financial services firms are ready to unlock unprecedented growth through digital innovation.
Global tech report: Technology insights
The digital transformation journey is an important strategic consideration for all sectors, none more so than technology. This means the tech sector has to do two things simultaneously: lead by example and rethink its own strategies.
In this article, Anna Scally (KPMG Partner and EMA Region Head of Technology Media and Telecoms, Liam Cotter (Partner, Management Consulting) and Rory Timlin (KPMG Partner, Technology Consulting) discuss how like all industries, the tech sector also faces challenges — and opportunities — in the rapidly evolving tech landscape.
Central Bank Updates
Central Bank: Reporting Registers of Information
On 7 February, the Central Bank or Ireland (Central Bank) issued an update on DORA registers of information and published a new webpage to assist firms in meeting their obligations under the DORA in respect of reporting registers of information.
This page clarifies that firms in scope are to submit their Register of Information to the Central Bank via the Central Bank Portal during the window of 1 to 4 April 2025.
It also outlines some key points and further information, including that a system guide to submitting the Register of Information via the Central Bank Portal will be published in March.
European Insurance and Occupational Pensions Authority Updates
Supervisory Statement on the deduction of foreseeable dividends from own funds under Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a Supervisory Statement that provides initial guidance to supervisors on the treatment of insurers’ foreseeable dividends.
The Statement clarifies that European (re)insurers and groups are required to deduct foreseeable dividends, distribution and charges (together ‘foreseeable dividends’) from their own funds as they no longer meet the criteria of permanence and availability and lack the loss absorbing capacity that characterises own funds items
EIOPA establishes a Consultative Expert Group on Data Use in Insurance
EIOPA has established its Consultative Expert Group on Data Use in Insurance. The findings of the Consultative Expert Group will support EIOPA’s future work on data sharing and its efforts to address emerging challenges and opportunities in the context of digitalisation.
It will provide a basis for our collective reflection how to optimise, with data, the positive impact of insurance for the benefit of the economy and society, while keeping in mind the need for ethical data use.
EIOPA is seeking feedback on its Opinion on Artificial Intelligence governance and risk management
EIOPA has launched a consultation on its Opinion on Artificial Intelligence governance and risk management, which provides supervisors and insurance undertakings guidance on how to interpret and implement insurance sector provisions in light of the use of AI systems in insurance. Stakeholders are invited to provide their feedback on the consultation paper by Monday 12 May 2025.
EIOPA market report on occupational pension funds shows more consolidation and a rebound in assets under management
EIOPA has published its 2024 ‘IORPs in Focus’ report, which provides insights into the latest developments in Europe’s occupational pension fund market. The report’s data reveals ongoing consolidation, a continued shift towards defined contribution plans and a noticeable recovery in terms of assets under management.
Solvency II: Reassessment of Natural Catastrophe Risks
The European Insurance and Occupational Pensions Authority (EIOPA) has published an opinion on the 2023/24 reassessment of natural catastrophe (Nat Cat or NatCat) risks in the standard formula under the Solvency II Directive. In the light of its findings, EIOPA recommends updates to the way NatCat risks are accounted for in insurers' standard formula calibrations.
Technical Advice on standard formula capital requirements for direct exposures to qualifying central counterparties
In response to the European Commission call for advice, EIOPA has published technical advice on standard formula capital requirements for direct exposures to qualifying central counterparties (QCCP) when insurance and reinsurance undertakings become direct clearing members.
Technical advice on the implementation of the new proportionality framework under Solvency II
In response to the European Commission call for advice, EIOPA has published technical advice on the implementation of the new proportionality framework under Solvency II.
Technical advice on the implementation of the new proportionality framework under Solvency II
In response to the European Commission call for advice, EIOPA has published technical advice on the implementation of the new proportionality framework under Solvency II.
IDD: Annual Report on Administrative Sanctions and Other Measures
EIOPA has published its fifth annual report on the administrative sanctions and other measures imposed by national competent authorities (NCAs) under the Insurance Distribution Directive (IDD). The report contains an overview of the sanctions issued in 2023, as well as information on the sanctions and the provisions of the IDD that were breached.
UK Updates
FCA response to the independent panels’ 2023/24 annual reports
On 09 January 2025, the Financial Conduct Authority (FCA) published their responses to the annual reports of their six independent statutory panels. These panels represent the interests of consumers, regulated firms and markets and the FCA are required to consult with them on the impact of their work, policies and practices.
Firms’ use of the National Fraud Database (NFD) and money mule account detection tools
On 23 January 2025, the FCA published the key findings from their review of payment services and account providers’ use of the National Fraud Database (NFD) and a money mule account detection tool to tackle risks associated with money muling activities.
FCA Adaptation Report 2025
On 28 January 2025, the FCA published its response to the Department for Environment, Food and Rural Affairs’ (“DEFRA”) invitation to report on climate change adaptation challenges faced by financial services firms.
PRA: Speeches
In January 2025, the Prudential Regulation Authority (PRA) published the following speeches:
PRA Climate Change Adaptation Report 2025
On 10 January 2025, the PRA published its response to the Department for Environment, Food and Rural Affairs’ (DEFRA) invitation to report on climate change adaptation challenges faced by financial services firms.
Staff Working Paper No. 1,108
On 10 January 2025, the PRA published a working paper by Iryna Kaminska, Alex Kontoghiorghes and Walker Ray. This paper analyses the presence of evidence for the preferred habitat theory in the transmission of quantitative easing and tightening programmes respectively.
Cost Benefit Analysis Panel Annual Report 2024
On 10 January 2025, the PRA published its Cost Benefit Analysis (CBA) Panel’s annual report for 2024. The CBA Panel is a statutory panel established to provide advice to the PRA and the Bank of England on the preparation of CBA. The Panel provides independent input to the PRA’s and the Bank’s CBAs, helping to support increased transparency and scrutiny of their policymaking.
Insurance Supervision: 2025 priorities
On 09 January 2025, the PRA published a letter from Gareth Truran (Executive Director, Insurance Supervision) and Shoib Khan (Director, Insurance Supervision) outlining the PRA’s 2025 priorities for the UK insurance sector.
Monthly Decision Maker Panel data - December 2024
On 09 January 2025, the PRA published the data gathered from the Decision Maker Panel (DMP). The DMP is a survey of Chief Financial Officers from small, medium and large UK businesses. The PRA uses it to monitor developments in the economy and to track businesses’ views.
Regulatory Digest
On 02 January 2025, the PRA published their regulatory digest for December 2024.
Other European and International Supervisory Authority Updates
EC: DORA: Notifications and Reports of Major ICT-Related Incidents and Cyber Threats
The following Delegated and Implementing Regulations supplementing the Regulation on digital operational resilience for the financial sector (DORA) have been published in the Official Journal of the European Union (OJEU):
- European Commission (EC) Delegated Regulation 2025/301 supplementing DORA with regard to regulatory technical standards (RTS) specifying the content and time limits for the initial notification of, and intermediate and final report on, major ICT-related incidents, and the content of the voluntary notification for significant cyber threats.
- EC Implementing Regulation 2025/302 supplementing DORA by laying down implementing technical standards (ITS) for the application with regard to the standard forms, templates and procedures for financial entities to report a major ICT-related incident and to notify a significant cyber threat.
Both Regulations will enter into force on 12 March 2025.
ESAs: DORA: Roadmap for Designation of Critical ICT Third-Party Service Providers
The European Supervisory Authorities (ESAs), that is, the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA) and European Securities and Markets Authority (ESMA), have published a roadmap for the designation of critical information communication technology (ICT) third-party service providers (CTPPs) under the Regulation on digital operational resilience for the financial sector (DORA).
OJEU: Calculating Technical Provisions and Basic Own Funds for Q1 2025 Reporting
European Commission (EC) Implementing Regulation 2025/216 which lays down technical information for calculating technical provisions and basic own funds for reporting under the Solvency II has been published in the Official Journal of the European Union.
The Implementing Regulation, which was adopted on 6 February 2025, enters into force on 8 February 2025. It applies from 31 December 2024.
IE: EIOPA consultation on liquidity risk of Institutions for Occupational Retirement Provision
Insurance Europe has published their response to EIOPA’s consultation on supervising the liquidity risk management of IORPs. IE agrees with the overarching objective of EIOPA's draft opinion on supervising IORP liquidity risk management but believes existing regulations sufficiently address the identified risks.
It advocates for a proportionate approach, tailored to each IORP's specific risk profile. Insurance Europe also opposes certain proposals such as the need for IORPs to set a new specific liquidity risk tolerance level deeming it unnecessary.
IE: Insurance industry: EU 'Omnibus' package can streamline sustainable finance rules and support green transition
Insurance Europe welcomed the new approach by the European Commission to enhancing competitiveness and ensuring sustainable prosperity through simpler sustainability rules. In particular, Insurance Europe welcomed the first Omnibus initiative which aims to simplify sustainability reporting and disclosure requirements.
On 26 February, the European Commission adopted a new package of proposals to simplify EU rules on sustainability and EU investments. The so-called “Omnibus” package includes amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Adjustment Mechanism (CBAM), and the InvestEu Regulation.
The Omnibus package includes a proposal which postpones the application all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028.
ESRB: Sector-Wide Shocks Under Solvency II
The European Systemic Risk Board (ESRB) has published its advice to EIOPA on the criteria for identification of exceptional sector-wide shocks as required by Article 144c(7) of the Solvency II Directive, as introduced by amending Directive 2025/2. These shocks would allow supervisory authorities to impose measures on bonuses and dividends to stabilise insurers' financial positions.
EIOPA, which consulted on a draft RTS in October 2024, must finalise and submit the RTS to the European Commission within 12 months of the Amending Directive's entry into force. Directive 2025/2 amending the Solvency II Directive, was published in the Official Journal of the European Union on 27 November 2024 and entered into force in January 2025.
OJEU: IRRD and Solvency II Amending Directive
The Official Journal of the European Union (OJEU) has published the following pieces of legislation:
- Insurance Recovery and Resolution Directive (IRRD).
- Directive amending the Solvency II Directive (Solvency II Amending Directive).
Both the IRRD and the Solvency II Amending Directive will enter into force on 28 January 2025. Member states are required to adopt and publish the measures necessary to comply with Articles 1 to 91, 96 and 97 of the IRRD by 29 January 2027.
Articles 92 to 95 shall apply from 30 January 2027. Member states are required to adopt and publish the measures necessary to comply with the Solvency II Amending Directive by 29 January 2027. These measures shall apply from 30 January 2027. The European Parliament approved this legislation under the corrigendum procedure on 8 October 2024. After that, the Council of the European Union adopted the legislation on 5 November 2024.
EIOPA Q&A
EIOPA Q&A Updates
Please see below for EIOPA’s response to recent queries which have been raised by the public for further clarification on the Solvency II requirements. The Solvency II requirements may change or become more prescriptive over time.
31 January: QRT S.37.02
EIOPA clarified in Q&A (#3003) the following:
- Template S37.02.04.03 should capture the exposure by country and should therefore be reported irrespectively of S.06.
- 37.02 should include all type of exposures and is therefore not limited to information provided in S.06.02.
- Look-through for collective investment schemes is applicable on a best effort basis.
31 January: QRT S.23.01
EIOPA clarified in Q&A (#2903) the following with regard to new rows in the QRT:
- R0800 should equal sum of R0560 and R0440, for columns C0010 through C0050 respectively
- R0810 should equal sum of R0560 and R0460, for columns C0010 through C0050 respectively
- Quantitative tiering limits don’t apply to R0440.
31 January: QRT S.09.01 & S.20.02
EIOPA provided in Q&A (#3198) context on the Validation Rules between QRTs S.09.01.01 and S.29.02.01.
31 January: QRT S.05.01
EIOPA clarified in Q&A (#3151) that instructions for written/earned premiums in ITS 2023/894 applies to those from proportional reinsurance accepted. These should be reported in a separate line.
31 January: Article 9 and 192(6) of DR (EU) 2015/35
EIOPA clarified in Q&A (#2537) reporting requirements for a reinsurance contract that includes a pay as paid clause.
31 January: S.03.01
EIOPA clarified in Q&A (#2896) that S.03.01 should only include off-balance sheet items, with the only exception of material contingent liabilities, which in Solvency II shall be recognised in the Balance Sheet according to Article 11 of the Delegated Regulation 2015/35 and should also be reported in S.03.01.
31 January: S.12.01 & S.13.01
EIOPA clarified in Q&A (#3128) the following:
- Future Guaranteed Benefits (FGB) in S.12.01 (and S.13.01) should include all future benefits that do not meet the definition of Future Discretionary Benefits (FDB) in article 1(35) of the Delegated Regulation 2015/35. Therefore, benefits from pure Index-linked and unit-linked (UL/IL) should be reported as FGB.
- FDB has the same meaning across all reporting templates, including S.12.01 and S.13.01, and it is the definition in Article 1(35) of the Delegated Regulation 2015/35.
- In S.12.01, “Future guaranteed and discretionary benefits" should include all future benefits.
31 January: QRT S.23.01 & S.23.04
EIOPA clarified in Q&A (#3143) that the new field ‘Non-available own funds in the reconciliation reserve’ should be considered as own funds such as those of related undertakings according to Article 335 (1)(d) and (f) of Delegated Regulation (EU) 2015/35 as indicated in S.23.01. There could also be other non-available own funds items, for example national specific own fund items identified by an NCA within the Reconciliation reserve.
22 January: Article 3(21)
EIOPA clarified in Q&A (#2999) based on the definition of DORA Article 3(21), what types of services should be considered ICT services.
22 January: Article 2(1)(o)
EIOPA clarified in Q&A (#3074) that ancillary insurance intermediaries are within the scope of DORA.
22 January: Article 3(60-64)
EIOPA clarified in Q&A (#3100) that guidance on the calculation of meeting 250FTE criterium can be found in the EC Recommendation 2003/361/EC, with regards to being in scope of DORA.
17 January: QRT S.14.02
EIOPA clarified in Q&A (#3001) that within the QRT, rows 12.1 and 12.2 together make up the total of Line of Business (“LoB”) 12, therefore the row total of LoB 12 should not be reported.
17 January: QRT S.14.02
EIOPA clarified in Q&A (#2952) that in LOB 4 and 5, what should be reported in C0140 are the insured properties, which also include vehicles.
17 January: QRT S.14.02
EIOPA clarified in Q&A (#2974) that where a contract covers fully or partially natural catastrophe, it should fully be reported in LoB 7.1, and not repeated in LoB 7.
17 January: QRT S.05.01 & S.26.06
EIOPA clarified in Q&A (#3192) that any reconciliation between S.05.01 and S.26.06 will not be straightforward. This is due to S.05.01 is provided from a local GAAP accounting perspective (usually IFRS). On the other hand, the S.26.06 is Solvency II valuation based.
17 January: QRT S.05.01
EIOPA clarified in Q&A (#3183) that in S.05.01, C0300/R2600 shall be reported all expenses considered within the technical result.
17 January: QRT S.14.01
EIOPA clarified in Q&A (#2658) that when a contract has a guaranteed rate C0260, C0261 and C0280 should be populated. Conversely, when a contract does not have any guaranteed rate, these fields should remain empty. EIOPA also outlined that if a contract includes applicable surrender options at the reporting date, C0200 and C0270 should be populated. Otherwise, these fields should remain empty.
17 January: QRT S.14.02 & S.14.03
EIOPA clarified in Q&A (#2913) that with regard to template S.14.03, the template should be subject to the application of a threshold based on the following:
- The sum of premiums earned for standalone cyber policies and policies with cyber as add-on coverage (where only the (estimated) premiums earned for cyber risk should be taken into account) is greater than 5 % of the overall non-life business pursued by the undertaking or greater than 5 million EUR.
OR - Number of policies that include cyber coverage (i.e., standalone cyber and/or cyber ad add-on policy) represent more than 3 % of the total number of policies of the non-life business). Provided that those conditions are met, all contracts underwritten during the year should be reported.
EIOPA also stated within S.14.03, field C0090, C0120 and C0140 should be gross amounts. C0110 and C0130 should be reported on an actual claim count basis and not as a proportion after reinsurance.
With regards to S.14.02, EIOPA clarified that the gross written stemming from contracts sold via brokers should be included in C0090.
17 January: Annex VI
EIOPA clarified in Q&A (#3194) that the CIC code no. 87 (“Loans to AMSB members“) refers only to the current members of the AMSB, and not former members.
17 January: QRT S.09.01
EIOPA clarified in Q&A (#3049) that C0100 (Realised gains/losses from the sale or maturity of an asset) is calculated as the difference between the selling/maturity value and the value according to Article 75 of Directive 2009/138/EC at the end of the prior reporting year (or, in case of assets acquired during the reporting period, the acquisition value).
EIOPA also clarified that for C0110 (Unrealised gains from an asset not being sold or maturing) is the difference between the value at the current reporting date and the prior reporting date (or the acquisition value if the asset was acquired during the reporting year). Values at these reporting dates should be calculated according to Article 75 of Directive 2009/138/EC.
17 January: QRT S.22.01
EIOPA clarified in Q&A (#3007) that this template requires reporting in gross amounts. Requirements to report in gross amounts can be found in Annex II of the ITS 894/2023.
Further information
For more on any of the items above, or any Insurance-related queries, contact Brian Morrissey, Head of Insurance. We'd be delighted to hear from you.
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