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Solvency II Reporting and Disclosure Tim O’Hanrahan.

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Presentation on theme: "Solvency II Reporting and Disclosure Tim O’Hanrahan."— Presentation transcript:

1 Solvency II Reporting and Disclosure Tim O’Hanrahan

2 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

3 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. 3

4 Art. 35 Supervisory reporting Regular Supervisory Report (RSR) -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

5 What is in those reports? i) SFCR and ii) RSR  5

6 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

7 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

8 What do you disclose for Underwriting Performance? SFCR (Public)RSR (Private) 1.The undertaking’s underwriting performance by material line of business and geographical area; 2.The undertaking’s 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 undertaking’s 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

9 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

10 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

11 Reporting required on other occasions? Predefined events –Predefined events are those that can lead to material changes to an undertaking’s 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

12 Are the reports Public or Private? PublicPrivate for Supervisors SFCRYes RSRNoYes 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

13 Process of Reporting Frequency of Reporting Submission dates Format of Reporting External auditing requirements 13

14 Process of Reporting – Frequency and Submission Dates SFCRRSRQuantitative Forms FrequencyAnnual1) 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 Quarterly 6* weeks after end. Annual 16* weeks after year end 14 * There is a limited extension until 2015

15 Process of Reporting –Submission Dates Due datesYear end 31/3/13Year end 31/12/13 SFCR – Annual Narrative & Quantitative Mid July 2013April 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

16 Process of Reporting – Frequency and Submission Dates SFCRRSRQuantitative Forms FormatCommon Template as developed by CEIOPS Sign off - internal – administrative or management body Yes Sign off – external auditing or verification No Yes to be developed 16

17 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 17

18 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

19 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

20 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 20

21 Thank you


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