Polish Financial Supervision Authority to support insurance industry during Coronavirus outbreak

On 20 March 2020 the Polish Financial Supervision Authority (“PFSA”) published the so-called Supervisory Stimulus Package for insurance industry (“SSP”). SSP is a package of extraordinary measures aimed at boosting the resilience of the Polish insurance industry to the impact of the COVID-19 pandemic conditions.

What does the PFSA offer within the SSP?

In the area of capital requirements and solvency:

• lowering the capital requirement by offering the possibility of calculating the quarterly SCR without changing the parameters
• opening a fast-track for the approval of ancillary own funds and long-term guarantee (LTG) measures
• derogating from the requirement to apply the maximum technical interest rate

In the area of day-to-day supervision:

• suspending new inspections of insurance companies and insurance distributors and, in relation to ongoing inspections – conducting these inspections with lower intensity (mostly using electronic communication)
• minimising or postponing burdensome supervisory activities (e.g. the SREP, stress tests, product intervention measures)
• releasing or postponing some reporting or disclosure requirements (e.g. reporting in respect of unit-linked products or submitting questionnaire for the purpose of the review of Solvency II system)
• applying a pragmatic approach to the documentation of the underwriting process for insurance contracts. The PFSA accepts that the entire process may be conducted remotely (by phone, e-mail or online), subject to the customer’s consent (the customer’s consent may also be expressed remotely); such process should be documented by collecting appropriate electronic files

Legislative initiatives in the area of management of insurance contracts:

• proposing a statutory amendment that will abolish the obligation to impose financial penalties on insurance undertakings for untimely settlement of claims due to the COVID-19 pandemic conditions

As PFSA stated, catalogue of SSP’s measures is non-exhaustive. These measures may be implemented depending on how the situation unfolds.

Please contact CMS experts for more information and to stay on track with a detailed proposition within SSP's.