Under Solvency II, insurers will be required to submit two main reports:
1) The Solvency and Financial Condition Report (SFCR) which contains public disclosure of data as well as narrative and quantitative reporting templates.
2) The Regular Supervisory Report (RSR) which contains additional quantitative and qualitative information for supervisors that is not publicly disclosed.
Both reports will contain templates covering business performance, governance, risk profile, valuation, and capital management. The SFCR is annual while the RSR can be every 3 years or more frequently if required. Reporting is due 14-16 weeks after the reporting period and must use common templates developed by European regulators. Proportionality allows less reporting for small
Original Description:
Original Title
Solvency II - Disclosure and Reporting - Tim O'Hanrahan.ppt
Under Solvency II, insurers will be required to submit two main reports:
1) The Solvency and Financial Condition Report (SFCR) which contains public disclosure of data as well as narrative and quantitative reporting templates.
2) The Regular Supervisory Report (RSR) which contains additional quantitative and qualitative information for supervisors that is not publicly disclosed.
Both reports will contain templates covering business performance, governance, risk profile, valuation, and capital management. The SFCR is annual while the RSR can be every 3 years or more frequently if required. Reporting is due 14-16 weeks after the reporting period and must use common templates developed by European regulators. Proportionality allows less reporting for small
Under Solvency II, insurers will be required to submit two main reports:
1) The Solvency and Financial Condition Report (SFCR) which contains public disclosure of data as well as narrative and quantitative reporting templates.
2) The Regular Supervisory Report (RSR) which contains additional quantitative and qualitative information for supervisors that is not publicly disclosed.
Both reports will contain templates covering business performance, governance, risk profile, valuation, and capital management. The SFCR is annual while the RSR can be every 3 years or more frequently if required. Reporting is due 14-16 weeks after the reporting period and must use common templates developed by European regulators. Proportionality allows less reporting for small
Overview What reports will be required? What is in those reports? Are the reports Public or Private? Process Frequency Submission Dates Format Sign-off/Audited Groups Proportionality Open Questions
2 Important Note The presentation is based on a combination of the Directive, Draft Level 2 Implementing Measures and current early drafts of Level 3 Guidance.
The resulting requirements will evolve and develop over time and all undertakings should keep up to date with developments.
-All information necessary for the purposes of supervision -Narrative Report -Quantitative reporting templates Solvency and Financial Condition Report (SFCR) - Publicly disclosed data -Narrative Report -Quantitative reporting templates
What reports will be required? 4 What is in those reports? i) SFCR and ii) RSR
5 Contents of SFCR and RSR A) Business, External Environment and Performance B) Governance and Remuneration Policy C) Risk Profile 1. Business and external environment 2. Underwriting Performance 3. Investment Performance 4. Performance from other activities 1. Governance Arrangements 2. Fit and Proper 3. Risk Management & ORSA 4. Internal Control 5. Internal Audit 6. Actuarial 7. Outsourcing 8. Any other disclosures Following risks 1. Underwriting Risk 2. Market 3. Credit 4. Liquidity 5. Operational 6. Other material Risk Exposures 7. Any other disclosures 6 Contents of SFCR and RSR D) Valuation for Solvency Purposes E) Capital Management 1. Assets 2. Technical Provisions 3. Other Liabilities 4. Other Disclosures 1. Own Funds - structure, amount & quality 2. MCR and SCR 3. SCR differences if standard formula or internal model used 4. Non-compliance with SCR/MCR 5. Other Disclosures 7 What do you disclose for Underwriting Performance? SFCR (Public) RSR (Private) 1. The undertakings underwriting performance by material line of business and geographical area; 2. The undertakings underwriting expenses by material line of business and geographical area over the year and compared to the prior year. 1. A discussion and analysis by the administrative, management or supervisory body of the undertakings overall underwriting performance; 2. Details of the undertaking's underwriting performance by line of business against plan, and significant factors affecting deviations from plan; 3. Projections of the undertaking's underwriting performance over the business planning period with details of significant factors that might affect underwriting performance; 4. Details of any reinsurance, ART and finite reinsurance programmes purchased, including those currently not being claimed on. 8 Contents of SFCR and RSR And also... Quantitative forms 1. Current draft, 59 different forms!!! 2. Including forms on: Profit and Loss Account Balance Sheet Off Balance Sheet Solvency Capital Requirement List of each investment held List of each derivative Technical Provisions Risk Profile Loss Profile 3. All forms will be reported annually, a subset will be reported every quarter.
9 Example List of Investments Each investment held with details such as: 1. Identification a) ID Code b) Security Type c) Issuer Name, Sector, Country 2. Price & Quantity a) Price b) Valuation Method c) Cost 3. Risk Section a) External Rating b) Rating Agency c) Underlying of Securitisation d) Duration
Reporting required on other occasions?
Predefined events Predefined events are those that can lead to material changes to an undertakings risk profile May require supervisory authorities to reassess the frequency and intensity of supervisory actions. Supervisory Enquiries Supervisors may request any information required to assess the situation of an undertaking 11 Are the reports Public or Private? Public Private for Supervisors SFCR Yes RSR No Yes Predefined Events Yes for items such as non-compliance with MCR or significant non- compliance with SCR and no satisfactory action taken in required timeline Yes Supervisory Enquiry Generally no but may give rise in certain circumstances to a public disclosure Yes 12 Process of Reporting Process of Reporting Frequency of Reporting Submission dates Format of Reporting External auditing requirements 13 Process of Reporting Frequency and Submission Dates SFCR RSR Quantitative Forms Frequency Annual 1) Full report at least every 3 years or when required by Supervisors 2) Material Updates Annually Quarterly and Annual Submission Date 14* weeks after year end 14* weeks after year end
Quarterly 6* weeks after end. Annual 16* weeks after year end 14 * There is a limited extension until 2015 Process of Reporting Submission Dates Due dates Year end 31/3/13 Year end 31/12/13 SFCR Annual Narrative & Quantitative
Mid July 2013 April 2014 RSR Narrative & Quantitative
Quarterly Quantitative
Mid July 2013
Mid August 2013 for Q1 ended 30/6/13
April 2014
Mid May 2013 for Q1 ended 31/3/13
15 Process of Reporting Frequency and Submission Dates SFCR RSR Quantitative Forms Format Common Template as developed by CEIOPS Common Template as developed by CEIOPS Common Template as developed by CEIOPS Sign off - internal administrative or management body Yes Yes Yes Sign off external auditing or verification No No Yes to be developed 16 Group reporting Solvency and Financial Condition Report Report to Supervisors Quantitative Forms Group Yes
Same as Single entity + additional requirements Yes
Same as Solo + additional requirements
Yes
Same as Solo + additional requirements
Subsidiary Could include in Group report (subject to agreement) i.e. Subsidiary would not have to complete Yes Yes 17 Proportionality How is Proportionality Demonstrated
Regular Supervisory Reporting (RSR) Frequency of RSR is not required annually
Qualitative forms Qualitative reporting and disclosure requirements are principled based Quantitative Forms You do not have to complete forms that are Not applicable
18 Open Questions Audit requirements : scope ? level of assurance ?
Public disclosure of some templates : which ones ?
National specificities : content ? role of EIOPA ? Can local GAAP be used for Solvency II ?
Proportionality : less requirements for small or less complex undertakings ? impact on comparability & aggregation of data ? automaticity of proportionality ?
19 Overview What reports will be required What is in those reports Are the reports Public or Private Process Frequency Submission Dates Format Sign-off/Audited Groups Proportionality Open Questions
Foundational Theories and Techniques for Risk Management, A Guide for Professional Risk Managers in Financial Services - Part II - Financial Instruments