Extension of time for reporting by non-life and life insurance companies to minimise the impacts of the coronavirus situation

The spread of the coronavirus and the rapidly deteriorating economy are affecting the activities of non-life and life insurance companies. To minimise the impacts, it is important that companies can ensure the continuity of their key operations and guarantee the insured interests. It is crucial that customer service continues, and that investment operations and solvency are monitored closely.

The Financial Supervisory Authority, in cooperation with the European Insurance and Occupational Pension Authority (EIOPA) and other national supervisory authorities within the EU, supports this objective by providing an extension of time for certain parts of reporting and by restricting its information requests and inspections. However, the solvency situation and impacts of market movements must be monitored more closely than before.

Updated reporting schedule

The submission dates of reports by non-life and life insurance companies will change as follows:

The FIN-FSA recommends that companies make every effort to submit the reports under points 1 and 3 as soon as possible after the reporting period.

The FIN-FSA also recommends that companies report in the Own Funds template (S.23.01) an estimation of the SCR for the end of the quarter reference date, and not the last calculated one as indicated in the Instructions.

The deadlines for narrative reports are extended as follows:

1. The publication deadline of the Solvency and Financial Condition Report (SFCR) is postponed, and the new submission deadline is 2.6.2020 (solo) and 14.7.2020 (group). *
   For the following templates: Balance-sheet (S.02.01), LTG (S.22.01), Own funds (S.23.01) and SCR calculation (S.25.01) the new submission deadline is 21.4.2020 (solo) and 2.6.2020 (group.)
   
   Insurance companies should consider the current situation as a “major development” as referred to in Insurance Company Act 8a: 6 § and publish at the same time of publication any appropriate information on the effect of the Coronavirus/COVID-19 in the published information.
   
   
2. The deadline for submitting the supervision report to the FIN-FSA is extended, and the new deadline is 20 May 2020.

Market movements must be monitored closely

Major market movements both in the equity and fixed-income markets affect the investment income and solvency of non-life and life insurance companies. The magnitude of the impacts depends on the risk profile of the companies, such as their equity allocation and interest-rate risk on both sides of the balance sheet. Under the prevailing exceptional circumstances, significant restraint should be shown in profit distribution and the payment of variable remuneration.

Companies, including their boards of directors, should be able to monitor the impacts of market movements on technical provisions and solvency in an adequate manner. Calculation on an annual basis as required by regulation, is inadequate in the context of major market movements.

In the FIN-FSA's view, companies should be able to conduct recalculation on a monthly basis, and to a significant extent on a weekly basis. In addition, the capacity is needed to calculate technical provisions at market terms, depending on the risk profile of the company as often as is needed to support internal reporting and risk management.

Inspection activities to be restricted

The FIN-FSA will restrict its inspection activities concerning non-life and life insurance companies as well as posing information requests unrelated to the coronavirus epidemic to supervised entities. No new inspections of non-life and life insurance companies will be commenced for the time being.

EIOPA has published releases related the situation, which are available at the EIOPA website.

For further information, please contact

• reporting: Kirsti Svinhufvud, Financial Analyst, tel. +358 9 183 5251 or kirsti.svinhufvud(at)fiva.fi
• other issues Teija Korpiaho, Head of Division, tel. +358 9 183 5528 or teija.korpiaho(at)fiva.fi 

*Corrected 25 March 2020.
** Corrected 26 March 2020.