During the latest workshop of the series “Taxonomy Meets the Market” on February 8, the European Insurance and Occupational Pensions Authority (EIOPA) together with the National Competent Authorities (NCAs), insurance undertakings, software providers, discussed and presented new developments on regulatory reporting and the upcoming 2.8.0 taxonomy release.
The release of Solvency II Taxonomy 2.8.0 with validations
January’s expected release of the final version of taxonomy 2.8.0 with validations, is postponed to 17 March, 2023, and the 2.8.0 Hotfix, if needed, latest in July 2023. Instead, the 3rd version of Public Working Draft (PWD3) was published to consult market participants.
Due to the scope of changes stemming from a comprehensive review of the Solvency II Directive, it was decided that the 2.8.0 release will be preceded by a number of PWDs to provide filers with more time for implementing their reporting solutions. While the first two PWDs introduced modelling changes to the Solvency II model, PWD3 focuses on providing revised validations and familiarising users with the new structure of the published materials.
For the reference period between Q4-2023 and Q4-2024 PEPP will use 2.7.0 release and IORPs will use 2.7.0 or 2.7.1 release. See the full EIOPA Taxonomy Roadmap here.
Cutting to the chase: The most relevant changes in 2.8.0 release
According to the Governance of Taxonomy Releases, the EIOPA Solvency II DPM and the XBRL taxonomy package 2.8.0 release are to be used from 31/12/2023 until a new version is announced.
The major amendments touched the set of modules and templates. When it comes to the templates, the changes led to the following outcomes:
- Re-design of cross-border reporting.
- Introduction of climate-related reporting.
- New template dedicated to cyber risk.
- And changes to internal models templates.
According to given statistics regarding the scope of amendments made by EIOPA to the templates - around 80 are revised, 40 are added and 30 templates are removed. Currently, the 190 unique tables exist in the 2.8.0 release.
The great bulk of changes is related to the affected validations and implementation of new validations. Based on the feedback provided by the EIOPA Expert Networks 3 (ENW3) and the EIOPA Information Technology and Data Committee (“ITDC”), the validation rules (VRs) have undergone changes. To bring more structured understanding, VR’s can be divided into three groups:
- Already existing VRs that continue to be valid in the new framework (48% of the total).
- Existing VRs that needed to be amended due to changes in the templates (33% of the total).
- New VRs (19% of the total) are consequently divided into New Variant –Old VRs implemented for new templates, new VRs on existing and new templates.
For example, in the amended template ‘BV251-Template17.01.02–Non-Life Technical Provision, Net Best Estimate of Claims Provisions = Gross – Total Recoverables’ entry points related to Quarterly ECB reporting (solo and third-country branches) have been removed. The applicability of the rule is therefore now limited to Solvency II reporting.
Important business changes ahead
Among other significant business changes, the upcoming inclusion of the Financial Conglomerates Reporting package is expected to be applicable by the end of 2023, to support the reporting of the new requirements by the regulated entities or mixed financial holding companies that wish to use it, including other EIOPA regular data requests that may potentially occur.
Also, the revised Decision on Institutions for Occupational Retirement Provisions (IORPs) Reporting are planned to be applicable by January 2025.
EIOPA maximises the use of technology for taxonomy management
Over the last years the content and complexity of the EIOPA reporting taxonomy have significantly grown. Different reporting packages have been incorporated into the same taxonomy enabling more consistency, maximising the value of single data dictionary, change management features and consultation options.
In 2022 EIOPA started to use dedicated technology to support the taxonomy developments. ATOME Matter collaborative metadata management and modelling platform now helps EIOPA in managing the regulatory reporting requirements for insurance and pension funds sector in the EU, in particular in the process of production of data models (DPM) and XBRL materials, as well as in collaboration when changes and updates are planned and introduced in subsequent cycles of reporting.
For more information please see ‘Plan for reporting taxonomy releases’ (p.3) published by EIOPA, available at the following link: https://www.eiopa.europa.eu/sites/default/files/plan_for_reporting_taxonomy_releases.pdf
As a supervisory authority EIOPA manages the ever-larger volumes of data and faces not only the need to communicate any changes to the market efficiently and clearly, but also to make sure that the quality of data is maintained even as the volumes grow and to adjust its internal workflows and data collection processes accordingly.
Contact us to discover how ATOME helps regulators and reporting entities to accommodate regulatory change, keep reporting quality high and the reporting burden as low as possible:
