The Joint Committee (JC) of the ESAs, the three European Supervisory Authorities (EBA, EIOPA and ESMA), launched on 06 March 2015 a public consultation on draft Implementing Technical Standards (ITS), which defines the quality steps for the credit assessments allocated by ECAIs (External Credit Assessment Institutions).
The proposed draft ITS have been developed on the basis of the Article 109 (a) of Directive 2009/138/EC (Solvency II Directive) and contain a table assigning the appropriate Credit Quality Steps to the rating categories of ECAIs. This mapping serves the calculation of the Solvency II capital requirements under the Standard Formula, and its main objective is to improve risk management of EU insurers, thus achieving better consistency between the banking and the insurance framework in this area.
According to the ESAs’ regulation, ESAs have to carry out costs-benefits analysis when drafting implementing technical standards, and submit it to public consultation. Pursuant to this disposition, ESAs have conducted impact assessment and included both the draft ITS and the whole IA process in the Consultation Paper, so that they can be evaluated and commented on by the stakeholders.
In order to improve the overall quality of the draft, the ESAs invite comments on any aspect of the paper. The three Authorities consider particularly helpful comments: a) containing a clear rationale; b) providing ESAs with feasible alternatives. The one and only way to submit contributions is through the Template for Comments, which is available for download on EIOPA’s website and has to be sent by email (JointCommitteeConsultation@eiopa.europa.eu) by 10 April 2015. ESAs will not process contributions sent after the settled deadline or provided out of the Template. Furthermore, as stated in the Consultation Paper, contributions will be published following the close of consultation, unless contributors request otherwise in the respective field of the Template.
As further steps of the consultation process, ESAs will consider all the feedback received, expecting to publish a final report. The three Authorities will then submit the draft ITS for endorsement by the European Commission by 30 June 2015.
Photo credits: Simon Cunningham