Responding to the publication of EIOPA's specifications on European wide insurance stress tests, ABI Assistant Director for Prudential Regulation, Steven Findlay, comments:
“EIOPA’s stress tests on insurers are the first since the implementation of Solvency II, and all large UK life firms will participate. The UK industry is well capitalised and under Solvency II insurers already hold capital to withstand severe stress, so this exercise is effectively a 'stress-on-a-stress' test.
"Insurers will work closely with the PRA and EIOPA throughout this exercise, which is designed to put balance sheets under extreme and hypothetical stresses. We will review the results when published at the end of the year.”