Insurance Insights May 2025

Central Bank Updates

Central Bank: Speech

The Central Bank of Ireland (the Central Bank) has published a speech titled "Monetary Policy Imperatives in a Changing Global Landscape" delivered by Governor, Gabriel Makhlouf. The speech highlighted the global progress in reducing inflation, particularly in the euro area, while noting that services inflation remains elevated.

Central Bank: Requirements for Insurance Undertakings

On 8 May, the Central Bank published the revised ‘General Good Requirements for Insurance Undertakings 2025’ in May which outlines the regulatory requirements for insurance and reinsurance companies operating in Ireland, for example on a cross-border basis. The document provides links to the revised Consumer Protection Code 2025,  the Minimum Competency Code 2017, the National Claims Information Database, and the Non-Life Premium Levy, among others. 

Central Bank: External Audit of Solvency II Public Disclosures

On 17 April, the Central Bank published the revised ‘The Central Bank’s Requirement for External Audit of Solvency II Regulatory Returns / Public Disclosures 2025’.  The Central Bank introduced its Requirement for External Audit of Solvency II Regulatory Returns/Public Disclosures in 2016 (the “Original Requirement”). The Central Bank is now amending the Original Requirement to remove captive insurance undertakings and captive reinsurance undertakings from the scope of the Requirement and to make other minor updates on account of the passage of time. These amendments apply with effect for the financial years ending on or after 30 April 2025.

Central Bank: DORA Communications

On 28 April and 23 May, the Central Bank published updates on the correction of validation issues identified by the EBA and provided a link to the revised ‘Guide to Submitting DORA Registers of Information on the Portal’.

UK Updates

FCA: Annual work programme 2025/26

On 08 April 2025, the FCA published their annual work programme, which outlines what they will deliver over the next year, as part of their five year strategy on their 4 strategic priorities:

• A smarter regulator: more efficient and effective.
• Supporting growth.
• Helping consumers navigate their financial lives.
• Fighting financial crime.

FCA: Retail banks’ treatment of customers in vulnerable circumstances

On 12 April 2025, the FCA published the findings of their review of how retail banks and building societies approach the treatment of customers in vulnerable circumstances that involve bereavement and power of attorney.

FCA: Regulatory Initiatives Grid

On 14 April 2025, the FCA published a grid which lays out the planned regulatory initiatives for the next 24 months for the Financial Services Regulatory Initiative Forum. The Forum consists of representatives from the following:

• The Bank of England (BoE)
• Competition and Markets Authority (CMA)
• Financial Conduct Authority (FCA)
• Financial Reporting Council (FRC)
• His Majesty’s Treasury (HMT)
• Information Commissioner’s Office (ICO)
• Prudential Regulation Authority (PRA)
• Payment Systems Regulator (PSR)
• The Pensions Regulator (TPR)

FCA: Data Decommissioning: Removing reporting and notification requirements

On 16 April 2025, the FCA announced they are consulting on a proposal to decommission certain regular returns and remove the relevant sections from SUP 16 in the FCA handbook. The consultation is now closed. The FCA will publish feedback on responses and issue a Policy Statement once they have reviewed all the comments received. The consultation applied to Insurance, Mortgage and Retail investment intermediaries; MIFIDPRU investment firms; Securities and futures firms; Investment management firms; Collective portfolio management firms; and Peer-to-peer lenders

PRA: Speeches

In April 2025, the PRA published the following speeches:

• Maintaining Momentum: Managing Climate risk in a changing world − speech by David Bailey
• Overseeing BPA growth safely - speech by Gareth Truran
• Renewed RTGS: Digital public infrastructure as a platform for innovation − speech by Dave Ramsden

PRA: Regulatory Digest

On 01 April 2025, the PRA published their regulatory digest for March 2025. The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.

PRA: What is the Financial Services Compensation (FSCS)?

On 03 April, the Bank of England provided an explanation of the FSCS. This scheme covers consumers when financial firms go out of business.

PRA: Matching Adjusting Investment Accelerator

On 08 April 2025, the PRA announced a consultation paper which proposes the introduction of a new framework to enable faster, capital efficient, investment by UK insurance firms in new assets. The framework, known as the Matching Adjustment Investment Accelerator, will remove the requirement to obtain prior approval from the PRA before a firm can claim Matching Adjustment benefit on certain assets, thereby making it easier for insurers to take advantage of investment opportunities more quickly. This consultation paper will close 04 June 2025.

PRA: Business Plan 2025/2026

On 10 April 2025, the PRA published their business plan for the upcoming financial year

PRA: Step-in Risk

On 22 April 2025, the PRA published their expectations around firms undertaking step-in risk assessments.

PRA: CP 10/25 Enhancing banks' and insurers' approaches to managing climate-related risks

On 30 April 2025, the PRA announced a consultation paper which proposes an update to the supervisory expectations for bankers and insurers. The proposals would help banks and insurers manage the effects of climate change on their businesses, and thereby maintain the essential services they provide to the economy.

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.

04 April 42(3)

EIOPA clarified in Q&A (#3212) the following with regard to the probability of default that should be use when calculating the adjustment to reinsurance recoverables for expected losses due to default of a counterparty where parts of the best estimate of technical provisions are ceded to unrated reinsurance undertakings subject to Solvency II: the probability of default used in the standard approach will not always be suitable. Undertakings are required to perform their own analysis to arrive at an approach that is assessed to be in line with the requirements in Article 42.

10 April: S.06.02

EIOPA noted in Q&A (#3287) the instructions for C0030 require clarification. In the meantime, the correct solution is to provide ‘None’ value for those rows in C0030 for which no LEI is available.

11 April: S.23.03

EIOPA clarified in Q&A (#3058) that BV357 has been amended in ITS (EU) 2023/894, by lowering the severity to Warning. EIOPA considers the need to further update this in the future.

11 April: S.06.02 & S.08.013

EIOPA clarified in Q&A (#3112) that a direct exchange of one currency to another at current market price, which is to be settled in a few days, should be categorised in S.06.02 as CIC 79 – Other and not listed in S.08.01

11 April: S.06.02

EIOPA noted in Q&A (#3237) an issue in S.06.02. Issuer Group is required for corporate bonds, even if the issuer has no majority owner and thus is the ultimate parent. If deemed necessary, EIOPA states this could be fixed in the next release. Until then, EIOPA considers adding proper explanation in the list of validations general comment column for respective rules.

30 April: Captives - Article 4(4)(5)

EIOPA clarified in Q&A (#2897) that there is an error in Articles4(4) & 4(5). This will be amended in the next ITS update. EIOPA also clarified that Article 4 provides risk-based thresholds and therefore defines more proportionate reporting requirements for captives that meet the criteria. If captives do not meet the conditions, they must report the templates relevant for the individual undertakings.

30 April: S.25 & S.26

EIOPA clarified in Q&A (#2879) that in forthcoming ITS amendments, Article 24 will specify explicitly the templates relevant for captive insurance ring-fenced funds and the ones for captive reinsurance ring-fenced funds.

30 April: S.06.02

EIOPA clarified in Q&A (#3281) that the Issuer Group should be reported in the field C0240, and it should correspond to the legal name.

30 April: S.05.01

EIOPA clarified in Q&A (#3023) that BV214 has been deactivated in the April 2025 deactivation cycle.

30 April: Other 

EIOPA clarified in Q&A (#3298) that index prices used in the symmetric adjustment calculation are sourced through LSEG’s Data scope Select.