SOLVENCY II NEWSLETTER

Transcription

1 SOLVENCY II NEWSLETTER DECEMBER 2015

2 Foreword We at Tools4F are delighted to present you the newest issue of our Solvency II Newsletter. We come back to you summarizing the important events that happened in We believe you will enjoy reading of the Newsletter and find some information useful. Following two topics are covered: 1. Important Solvency II developments during the year 2015 summarization of the most important Solvency II related events that occurred this year 2. Tools4F projects, participations and events What we have been up to this year? Check out the list of our involvements in various projects and important events. If you are interested in some of the previous releases of the Solvency II Newsletter, please refer to our official website where you can download all of them easily (no registration needed). We wish you a pleasant reading. 1 Important Solvency II developments during 2015 January February Level 2 Solvency II Delegated Act (officially Commission Delegated Regulation (EU) 2015/35) further developing some issues from the Solvency II Framework Directive enters into force. EIOPA publishes Set 1 of the Solvency II Guidelines in all official languages of the European Union. Half of Level 3 Guidelines is thus completed. EIOPA starts monthly publishing of technical information. This includes Solvency II relevant risk-free interest rates term structure with detailed documentation and symmetric adjustment of the equity capital charge used for the SCR valuation according to standard formula. EIOPA is continuously developing XBRL Tool for undertaking (i.e. simple and basic software tool to create and validate XBRL instances from Solvency II harmonized quantitative reporting templates). Beta release based on Preparatory Taxonomy was launched in February; updates and drafts of tool for full SII reporting were released during next months. Final version of T4U

3 (based on the final DPM and taxonomy see below) has not been launched yet. March April June September November December The European Commission adopts a first group of six Solvency II Implementing Technical Standards (relating to approval processes). ITS are part of so called Level 2.5 and are legallybinding as well as directly applicable. EIOPA is continuously developing Data Point Model and Taxonomy in relation to the XBRL reporting. Several draft versions were released since March. In October, EIOPA releases the final version; however, it is still under consideration and subject to further changes. May 31, 2015 is the transposition date of Solvency II Directive (as amended) to the national legislations. Several countries have not implemented Directive to this date. April 1, onwards, phasing-in of Solvency II for supervisory approval processes and decisions related to group supervision (article 308a of the Solvency II Directive) began. Meaning that regulators should have the power to decide on the approval of (e.g.) USP, ancillary own funds and internal models. Submission of annual reporting by undertakings under the Solvency II Preparatory Phase with reference to December 31, 2014 EIOPA publishes Set 2 of the Solvency II Guidelines in all official languages of the European Union. Level 3 Guidelines are thus completed. Commission adopts amendment to Solvency II Delegated Act, concerning infrastructure investments, European Long-Term Investment Funds, the equity transitional measure, and Multilateral Trading Platforms. The European Commission has adopted a second group of seven Solvency II Implementing Technical Standards (relating e.g. to assessing external credit assessments or capital add-on) Submission of quarterly reporting by undertakings under the Solvency II Preparatory Phase with reference to September 30, 2015 The European Commission adopts a third group of three Solvency II Implementing Technical Standards (relating to reporting) making the legislation almost complete (there are few documents left to be officially approved). On Dec 31, 2015 preparatory phase terminates.

4 1 January 2016 Application of the Solvency II regime You may find all important aforementioned Solvency II documentation on our website. We put links to the documents in one place in the most possible comprehensible form. 2 Tools4F projects, participations and events This year, our team members were (and some of them still are) involved in many Solvency II related projects. In the course of 2015, we have started offering and implementing compact Solvency II solution best fitted to medium and small-sized insurance companies. We have been providing educational seminars mainly in the area of general Solvency II and ORSA focused both on managers and actuaries. Many other projects and events took place in 2015 though; here are some of them: Compact Solvency II solution In the cooperation with an international IT company ADASTRA, we have developed Compact Solvency II solution covering all three pillars and best suited to small and medium-sized companies. Implementation of Solvency II solution A several parts of our compact solution were implemented in practice. We have delivered and implemented Standard Formula Calculator, Asset Model and ad-hoc preparatory phase reports in XBRL for the regulator. We supported the company in the discussion with regulator regarding these preparatory reports and numbers there included. Valuation of technical provisions according to SII rules We have valuated both claim outstanding provisions and premium provisions according to the most recent Solvency II rules. The valuation was done for the provisions at the end of the year as well as at the end of third quarter. Tools4F representant in Adriatic region New insurance expert (Krešimir Kolar) is now on our team. He is Tools4F local representative for the Adriatic region with the office in Zagreb. Krešimir's key competences are financial reporting, IFRS, asset management, Insurance business processes and risk management (Solvency II, MCEV). He is in business since Internal model implementation

5 Our team member leads an implementation of the internal model for the international insurance company. Documentation map and policies preparation We have developed the internal documentation system (documentation map) and created important Solvency II policies (e.g. policies in relation to actuarial function, risk management, underwriting risk, capital management, outsourcing, ). ORSA We have designed and currently are implementing ORSA process including reporting, future projection, stress testing and assessment of system of governance. Review of the Solvency II preparedness We performed a review of the local insurance company's preparedness on Solvency II, prepared gap analysis and presented recommendations for the future development. Dashboard design and tool development We have designed dashboard (including preparation of MS Excel tool) intended for a Board of Directors members to have a better overall insight into the company with the focus on the risk matters. E-learning course for determining Fit requirement We have completed preparations of special E-learning course by means of which company can regularly verify appropriate knowledge of the its staff and therefore be able to more easily assess if individual person meets Fit requirements. Tool for risk management system We have prepared a comprehensive tool to support company s riskmanagement function and to facilitate compliance with Solvency II requirements. Solvency II training course for managers We have started offering training course ( Under the roof of Solvency II ) designed especially to key managers that should help them to better understand their role in the Solvency II environment, risks associated with their activities and their involvement in the (e.g.) ORSA process. We have held several of the courses in the Czech Republic so far. Seminars at University of Economics, Prague This year we have started organizing 1-2 day seminars at the local University. Seminars are focused not only to actuarial topics but also to

6 financial and IT themes. We have also covered Solvency II in general and ORSA. Conclusion We are ready to provide you with a professional support in each area of the Solvency II and related tasks, we are capable of handling issues of all three pillars. Our team is looking forward to potential cooperation; we believe that services of Tools4F may be a great aid to your company not only within all Solvency II matters. In conclusion, please let us on behalf of the whole Tools4F team wish you a Merry Christmas and Happy New year!