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Actuarial Association of Europe

AAE

The AAE brings together the actuarial associations in the European Union to represent the actuarial profession in discussion with the European Union institutions on existing and proposed EU legislation which has an impact on the profession.

Lobbying Activity

Meeting with Didier Millerot (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

30 Oct 2025 · Exchange of views on sustainable finance files and climate resilience

Response to Digital package – digital omnibus

13 Oct 2025

The Actuarial Association of Europe welcomes the initiative on regulatory simplification through the Digital Omnibus, including elements that focus on ensuring the smooth application of the AI Act. As a profession extensively engaged in insurance, pensions, financial services and risk management, actuaries are involved in the design, deployment, and oversight of AI systems. We note the following points for consideration (limiting our comments to the areas relating to the AI aspects of the Digital Omnibus): 1. Regulatory clarity and coherence Consistent and predictable application of the AI Act across Member States is vital. We strongly support efforts to reduce fragmentation and divergent supervisory approaches. Clear guidance, including sector-specific examples, will help firms distinguish AI systems within scope from traditional statistical and actuarial models (e.g. GLMs). Such clarity avoids uncertainty, reduces unnecessary compliance costs, and ensures proportional application of rules. It is also important to highlight that the key regulatory challenge often lies not in the mere use of AI techniques, but in the degree of adaptiveness and autonomy of the model. 2. Proportionality The AI Act should be applied proportionately to reflect both the scale of undertakings and the potential impact of AI use cases. Simplified compliance mechanisms for SMEs and mid-caps are welcome, but proportionality must also consider consumer impact, not only business size. This would align the AI Acts implementation with Solvency II principles while safeguarding fairness, consumers and policyholders. Furthermore, any new regulation should avoid undermining Europes ability to compete globally. 3. Duplication Many obligations under the AI Act intersect with existing insurance regulation, including Solvency II and EIOPAs guidelines on governance, risk management, and product oversight. Simplification should aim to embed AI governance within these established frameworks, rather than creating parallel structures. This reduces duplication, lowers administrative burden, and fosters consistent supervisory expectations. 4. Practical guidance Simplification is best achieved through practical, accessible guidance. We encourage the preparation of sector-specific best practices covering documentation, testing, and monitoring obligations, with a clear distinction between obligations of means (reasonable efforts) and obligations of results (strict outcomes). This will ensure feasible implementation, particularly where technical limitations (e.g. explainability of complex models) apply. To this extent, we welcome EIOPAs endeavours to publish an opinion on AI Governance and Risk Management in insurance. 5. Skills and support structures The success of the AI Act depends on the availability of expertise within firms and supervisors. Simplification measures should include proportionate training and capacity-building requirements, practical toolkits and harmonised templates for compliance. This reduces costs while ensuring high standards of governance. 6. Forward-looking adaptability & sustainability Given the rapid evolution of AI, simplification should also provide mechanisms for adaptability. This could include periodic Commission guidance or supervisory convergence tools to address emerging technologies (e.g. generative AI) without requiring legislative amendment. Consideration should be given to the long-term sustainability of the AI ecosystem in Europe, ensuring that advantages gained from fully leveraging AI do not undermine its own foundations. Simplification of the AI Acts application will support the right balance between innovation, consumer protection, and competitiveness. By enhancing regulatory clarity, embedding proportionality, avoiding duplication with existing frameworks, and providing practical support to companies, the Digital Omnibus can significantly reduce compliance costs while maintaining high standards of trustworthiness in AI.
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Response to Delegated Regulation supplementing the review of prudential rules for the insurance and reinsurance sector (Solvency II)

2 Sept 2025

The Actuarial Association of Europe (AAE) welcomes the opportunity to respond to the consultation on the review of the Solvency II Delegated Regulation. Actuaries are central to sound risk management, financial stability, and the long-term resilience of the European insurance sector. We support the Commissions aims to encourage long-term investment, reduce unnecessary burdens, and enhance proportionality, while maintaining strong policyholder protection. However, we are concerned that some amendments risk shifting Solvency II from a principles-based to a more rules-based regime. We stress the importance of maintaining a principles-based approach and the responsibility of undertakings, especially through actuarial and risk management functions. Key observations: Policyholder protection: While the framework supports wider EU priorities such as the Green Deal and competitiveness, protecting policyholders must remain the overriding objective. Any recalibration of capital requirements, particularly where safety margins are reduced, should be accompanied by a clear responsibility for undertakings to demonstrate appropriateness in their ORSA. Reliance on data and judgement: The draft amendments highlight climate scenarios in data provisions. We recognise climate change as a material risk and support its explicit consideration. At the same time, undertakings must not rely solely on historical data but also on forward-looking developments across all material risks. Actuaries have always combined experience with future expectations, applying professional judgement to ensure that best estimate cashflows reflect likely realities. It would be more consistent to emphasise this principle across the framework, with climate as one example. Proportionality and simplification: We support stronger and more consistent proportionality measures, especially for small and non-complex undertakings. However, some new requirementssuch as calculating expected profits in future feesrisk adding burden without clear benefit. Simplification should not be undermined by parallel new obligations. Methodological changes o Extrapolation: The minimum Alpha of 11% could cause excessive volatility in case of short-term market distortion. A higher value should be used for stability. We support the proposed regulation for the determination of the first smoothing point which aims at ensuring stability in the valuation. o Volatility Adjustment (VA): While refinements are welcome, the Credit Spread Sensitivity Ratio (CSSR) will add complexity without solving reliance on currency-specific reference portfolios. The calculation should be limited to RSR reporting, with extraordinary recalculations only for material changes. VA use should continue to be supported by effective ORSA oversight. o Interest rate risk: The amendment of the calibration especially aims at an appropriate treatment of low and negative interest rates. The sharp increase of interest rates observed in 2022 showed that calibration focused on downward shocks may no longer be sufficient. A reassessment should address both upward and downward movements and different yield curve shapes. o Long-term equity: Excluding CIUs and financial sector bonds from liquid assets can be overly conservative. Liquidity tests should not rely only on crude ratios but capture a wider range of constraints. o Prudent deterministic valuation: This proportionality measure may be useful for some undertakings but has clear limitations. Strong reliance on actuarial judgement is essential for responsible application. Reporting: We support efforts to streamline SFCR and reporting templates. However, we note that the overall reporting requirements including expected new sustainability requirements may offset these gains. Our detailed comments on individual articles of the draft Delegated Regulation are included in the attached document.
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Response to Apply AI Strategy

3 Jun 2025

The Actuarial Association of Europe (AAE) supports the European Commission's ambitious "Apply AI Strategy" initiative, highlighting the potential of AI in key sectors such as insurance, risk management, and pensions. These areas are of special relevance to us, as actuaries are extensively involved in these sectors, providing expertise in managing risks, pricing products, and ensuring long-term financial sustainability. A balanced regulatory approach, which combines flexibility and responsible oversight, will be crucial in realising AI's potential benefits while safeguarding consumers and public trust. We emphasise the need for a proportionate, risk-based framework that supports innovation while avoiding unnecessary barriers, and at the same time addresses ethical and social implications. Transparency, fairness, and robust oversight, especially in sensitive applications such as insurance pricing and claims management, are vital to prevent unintended biases. The actuarial profession, bound by rigorous ethical standards and a strong code of practice, is well-positioned to contribute significantly to trustworthy and ethical AI implementation, ensuring consumer protection and fairness. Europe has made meaningful progress in AI adoption and value creation; maintaining and building on this position will depend on ensuring professional and ethically grounded implementation an area where actuaries are well-placed to contribute. Regulatory clarity and openness are also essential. The AAE previously welcomed the European Commission's recent guidelines clarifying the definition of AI systems, which significantly enhanced regulatory certainty. Clear guidelines such as these encourage responsible innovation by ensuring that AI developers and users understand their compliance obligations, thus avoiding inadvertent regulatory breaches or unnecessary barriers to adoption. We welcome the continued clarity and proactive communication from the Commission to foster an open and innovation-friendly regulatory environment. To support these objectives, we propose enhancing AI governance through practical, sector-specific guidelines. Guidelines should encourage transparency, robust testing, ongoing validation, and continuous monitoring of AI systems. These measures will effectively manage operational risks, prevent unintended market impacts, and further safeguard consumer interests. Equally important is targeted investment in professional skills development, ensuring that key professionals are well-equipped with up-to-date competencies to manage and oversee advanced AI tools effectively. Additionally, improving data availability and infrastructure, through initiatives that enhance access to reliable, high-quality datasets, would significantly empower the insurance and risk management sectors to leverage AI reliably and responsibly. Finally, targeted investment through a dedicated EU-wide AI fund could effectively support innovation and reduce dependency on non-European providers. Moreover, strategic investment initiatives could facilitate greater collaboration between research institutions, industry stakeholders, and policymakers, ensuring that AI advancements align closely with Europe's long-term strategic objectives, economic resilience, and competitive positioning globally. Last but not least, the attraction and retention of talent is necessary and of paramount importance for the sustainable advancement of AI in Europe. Together, these strategic recommendations can support Europe's ambition to become a global leader in trustworthy, inclusive, and sustainable AI across critical economic sectors.
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Response to Establishment of the scientific panel of independent experts under the AI Act – implementing regulation

12 Nov 2024

We appreciate the opportunity to comment on the draft Commission Implementing Regulation outlining the rules for applying Regulation (EU) 2024/1689, which pertains to establishing a scientific panel of independent experts in artificial intelligence. As significant users of data and artificial intelligence, the actuarial profession is closely monitoring and is determined to be an active contributor to the developments in this field. We would like to provide comments on the following points: Scope of the Scientific Panels Mandate: In the context of the AI Act, the Scientific Panels primary role (cf. Article 68) is to support the Commission concerning general-purpose AI (GPAI) models. The current draft emphasises this focus, detailing how the Scientific Panel should issue alerts specifically for GPAI. We feel the draft could more comprehensively address topics beyond GPAI, as the current emphasis appears somewhat limited to GPAI concerns. The AI Act also mandates the Scientific Panel to address issues related to surveillance, cross-border surveillance, and activities outlined in Article 81. Selection Criteria for Panel Experts: Article 3, paragraph 3 of the draft specifies that experts should be chosen to ensure "multidisciplinary, adequate, and up-to-date scientific or technical expertise in AI, including expertise in applied sectors, fundamental rights, and equality, as appropriate." However, the AI Act itself more narrowly states that "the scientific panel shall consist of experts selected by the Commission on the basis of up-to-date scientific or technical expertise in AI." While the AI Act does not explicitly reference applied sectors, fundamental rights, or multidisciplinary criteria, we support this broader interpretation in the draft. We believe that fundamental rights and equality are important considerations and encourage the criteria to remain inclusive, even if it extends beyond the original language of the AI Act. Mandate for Recommendations and Opinions: Article 7 of the draft mentions recommendations, opinions, or qualified alerts. While qualified alerts are well-defined in terms of process and review by the AI Office, the extent to which the Panel can independently issue recommendations or opinions remains unclear. Does the Panel have the authority to make recommendations or issue opinions without AI Office review? We would welcome further clarification on the Panels mandate in this regard. Thank you again for the opportunity to provide feedback on this important regulation. We look forward to continued engagement as the AI regulatory framework develops.
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Response to Review of measures on taking up and pursuit of the insurance and reinsurance business (Solvency II)

12 Jan 2022

From the AAE’s point of view, Solvency II has proved to be a well-functioning risk-based framework which is suitable to ensure policyholder protection and financial stability in Europe. Nevertheless, the experience of 5 years of application and especially the low interest rate environment, the COVID-19 pandemic and the progressing climate change revealed the need to reassess the current framework. The EU-Commission widely follows EIOPA’s opinion. We identified the following shortcomings of the proposal: a) A comprehensive view and assessment of the resulting change of the Solvency II-framework remains unclear, as important specifications of relevant parameters shall become subject to a regulation in upcoming delegated acts or implementing technical standards. The wide-ranging new additional powers of the EU Commission leave much room for a future transformation of the current proposal. b) A robust and reliable impact assessment is missing. The impact will significantly depend on the supposed interest rate environment and on the final specification of the amendments. As the overall sum does not reveal the different exposures of countries or lines of business, a meaningful interpretation is not possible.
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Response to Amendments to the implementing rules on solvency applicable to insurers

7 Dec 2018

Thank you for the opportunity to provide feedback on this draft Delegated regulation. Please see attached document for the AAE submission. Actuarial Association of Europe
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Meeting with Andrea Beltramello (Cabinet of Vice-President Valdis Dombrovskis)

28 May 2018 · Solvency II, Sustainable Finance, IFRS17

Meeting with Tatyana Panova (Cabinet of Vice-President Valdis Dombrovskis)

30 Mar 2017 · Solvency II, IORPs

Meeting with Mette Toftdal Grolleman (Cabinet of Commissioner Jonathan Hill)

12 Jan 2016 · IORP and Insurance Block Exemption Regulation

Meeting with Mette Toftdal Grolleman (Cabinet of Commissioner Jonathan Hill)

31 Mar 2015 · Introductory meeting