Solvency II
Reporting and Disclosure
Tim O’Hanrahan
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.
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What reports will be required?
Art. 35 Supervisory reporting
Solvency and Financial Condition Report
(SFCR)
- Publicly disclosed data
-Narrative Report
-Quantitative reporting templates
Regular Supervisory Report (RSR)
-All information necessary for the purposes of
supervision
-Narrative Report
-Quantitative reporting templates
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5

What is in those reports?
i) SFCR and ii) RSR
Contents of SFCR and RSR
A) Business,
B) Governance
External
and
Environment and Remuneration
Performance
Policy
C) Risk Profile
1. Business and
external
environment
2. Underwriting
Performance
3. Investment
Performance
4. Performance
from other
activities
Following risks
1. Underwriting
Risk
2. Market
3. Credit
4. Liquidity
5. Operational
6. Other material
Risk Exposures
7. Any other
disclosures
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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
Contents of SFCR and RSR
D) Valuation for Solvency
Purposes
E) Capital Management
1.
2.
3.
4.
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
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Assets
Technical Provisions
Other Liabilities
Other Disclosures
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.
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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.
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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 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
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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 noncompliance 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
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Process of Reporting
Frequency of
Reporting
External
auditing
requirements
Process of
Reporting
Format of
Reporting
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Submission
dates
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
* There is a limited extension until 2015
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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
Mid July 2013
April 2014
Quarterly
Quantitative
Mid August 2013 for
Q1 ended 30/6/13
Mid May 2013 for Q1
ended 31/3/13
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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
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Group reporting
Group
Subsidiary
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Solvency
and
Financial
Condition
Report
Report to
Supervisors
Quantitative
Forms
Yes
Yes
Yes
Same as Single
entity +
additional
requirements
Same as Solo
+ additional
requirements
Same as Solo
+ additional
requirements
Could include in Yes
Group report
(subject to
agreement) i.e.
Subsidiary
would not have
to complete
Yes
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
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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 ?
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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
Thank you