Carlos Montalvo, Executive Director of EIOPA reaffirmed EIOPA’s commitment to deliver the XBRL Tool for Undertakings (T4U) despite the cut to its budget. “I can confirm that there will be a toolkit for undertakings, “Mr Montalvo told Solvency II Wire. “As announced, it will be a simple and basic tool oriented towards small and medium sized insurance undertakings.”
The EIOPA budget for 2015 has been slashed by 7.6% from last year. In a press release EIOPA said it has to re-prioritise its work streams as a result and cancel production of the IT supervisory toolkit related to XBRL reporting (T4S). The T4S was expected to support National Competent Authorities (NCAs).
“The necessity to cancel the extension for supervisors (T4S) stems from the need to ensure delivery of the tool for undertakings,” Mr Montalvo said.
The cancellation will have an impact on the preparation for Solvency II supervisory reporting for smaller NCAs that do not have sufficient resources and expertise. These NCAs might now find it more difficult to prepare for the new supervisory regime, he added.
Mr Montalvo also warned about the implication of the cancellation. “This decision goes against EIOPA’s vision on how to prepare for Solvency II, but we were forced to make it in order to ensure the high quality of our other deliverables.”
The T4U will be made available as an open source tool covering the full Solvency II reporting requirements by the 3rd quarter of 2015.
A severe setback for supervision and industry
The decision to cut the EIOPA budget was adopted by the European Budgetary Authority in December 2014.
In the press release announcing the budget cut Mr Montalvo said the cut was “putting at risk the effective delivery of the main tasks assigned to EIOPA by the European law.”
As a result of the budget reductions EIOPA has embarked on a re-prioritisation project that includes a 20% cut to the Solvency II training programme for supervisors and de-prioritisation of several work streams in the areas of financial stability and consumer protection.
The reduction of the budget for supervisory training will be particularly irksome for industry as it has openly acknowledged that a lack of expertise among national supervisors is impeding Solvency II preparatory work.
An EIOPA spokesperson told Solvency II Wire that the final decision on the outcome of the re-prioritisation exercise regarding which products and deliverables are to be postponed, cancelled or kept, will be communicated by EIOPA in March 2015.
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