The European Insurance and Occupational Pensions Authority (EIOPA) today submitted two sets of draft regulatory technical standards (RTS) to the European Commission on new macroprudential tools that have been introduced in the Solvency II framework following its recent review.
The updated framework includes two key enhancements:
- Liquidity risk management plans (LRMPs) for insurers, which strengthen the sector’s resilience by ensuring they maintain sufficient liquidity to meet obligations even under stress;
- Macroprudential risk analyses, which improve supervisors’ ability to monitor systemic risks and potential spillovers by incorporating macroprudential considerations into insurers’ risk management practices.
The technical standards submitted today bear out how these new requirements will function in practice.
On liquidity risk management plans
The review of the Solvency II Directive introduced a requirement for undertakings and groups to develop LRMPs to ensure they have sufficient liquidity to meet financial obligations toward policyholders and other counterparties, even under stressed conditions.
The RTS set out the criteria for selecting undertakings that need to perform medium and long-term liquidity analyses in addition to short-term assessments. They also specify the content of LRMPs and how frequently undertakings must update them.
A combination of quantitative and risk-based selection criteria is proposed:
- Solo undertakings and groups with assets above €20 billion should cover medium and long-term liquidity analyses in their LRMPs;
- National supervisors, however, may waive this requirement for undertakings with low liquidity risk exposures (opt out) or extend it to entities with smaller balance sheets if their risk profile warrants inclusion (opt in).
Plans should be updated at least annually and without delay in case of significant changes either in the risk profile of the undertaking or in relevant external conditions.
On macroprudential analyses
The second set of RTS in today’s package details which (re)insurers must integrate macroprudential analyses into their Own Risk and Solvency Assessments (ORSA) and their application of the prudent person principle (PPP). Supervisors will study these analyses in aggregate and provide feedback to enhance future assessments.
The selection criteria for macroprudential analyses combine a quantitative threshold (€20 billion in assets) with risk-based criteria, giving supervisors sufficient leeway in decision-making.
Read the RTS on macroprudential analysis
EIOPA Chair Petra Hielkema said: “This timely update strengthens the framework in the wake of market episodes that underlined the relevance of liquidity risks to long-term investors and amid heightened concerns about the level of interconnectedness between different corners of the financial system. The standards were developed to allow for a flexible, risk-based and proportional implementation.”
Next steps
The European Commission will now review the RTS and decide on their adoption within the next three months.
Details
- Publication date
- 17 November 2025