In this article from InsuranceERM, Guy Carpenter’s Luca Tres, Head of EMEA Strategic Risk and Capital Life Solutions, discusses final guidance from the European Insurance and Occupational Pensions Authority (EIOPA) regarding mass lapse reinsurance structures.
Among the most heavily debated portions of the consultation paper is the “risk window,” or the timeframe to aggregate lapses and potentially trigger a claim in case the attachment point is reached. Luca explains that the 12-month risk window is appropriate, but it allows for exceptions for insurers with specific risk profiles.
“As the document is not directly enforceable but is part of EIOPA’s coordination approach, explaining those exceptions wasn’t strictly necessary,” Luca maintained. “However, one could argue that, by clearly defining certain scenarios as ‘exceptional,’ the main message supporting the 12-month risk period is even more solidified.”