Omnibus II agreement on long-term
guarantee package and transitional
measures
Solvency Consulting Knowledge Series
Authors
1 Introduction
Dr. Manijeh McHugh
Dr. Simon Schiffel
All’s well that ends well: For many
years the insurance industry has
been waiting for an agreement on the
Omnibus II Directive. The publication
of the Directive in May 2014 –
together with the European Commission’s suggested final version of the
Delegated Acts in October 2014 –
herald the last lap of Solvency II
implementation.
Contact
solvency-solutions@munichre.com
November 2014
One of the main reasons for the
delayed introduction of Solvency II
was the intensive debate on the evaluation of long-term liabilities and the
long-term guarantee (LTG) package.
Fundamentally, the LTG problem
concerns the valuation and discounting of long-term liabilities, which is
of particular interest in life business.
After a long debate about this issue,
Solvency II now includes regulatory
measures that are supposed to mitigate the impact of short-term market
movements with respect to insurance business of a long-term nature.
A further challenge in the focus of
the insurance industry was the
appropriate transition between
Solvency I and Solvency II in order to
allow for a smooth introduction without market disruptions, while at the
same time providing policyholder
protection.
The aim of this article is to illustrate
the agreement reached on both of
these topics, and to discuss the
implications based on the Omnibus II
Directive and the Delegated Acts as
at October 2014. The article is
divided in two parts: The next chapter discusses the permanent measures of the LTG package, i.e. extrapolation, volatility adjustment,
matching adjustment and extension
of recovery period. Those parts of the
LTG package which are only applicable temporarily, and transitional
measures defined in the Omnibus II
Directive are presented in Chapter 3.
2 Long-term guarantee
package
2.1 Background and overview
In the first half of 2013, the European
Insurance and Occupational Pensions Authority (EIOPA) carried out a
quantitative impact study on longterm guarantees (“Long-Term Guarantees Assessment” – LTGA) to clarify key issues relating to the valuation
of long-term liabilities. The main
objective of the impact study was to
test different regulatory measures to
evaluate the long-term obligations
under Solvency II, the impact of the
interest rates used for the valuation
of liabilities, and the calculation of
the risk-capital requirement. The following measures were tested: Counter-cyclical premium (CCP), various
extrapolation methods, classical
matching adjustment, extended
matching adjustment, transitional
measures, and extension of recovery
period. For a summary of the results
and the discussion about the LTGA
in summer 2013, please refer to our
Knowledge Series “EIOPA publishes
the findings of the quantitative
impact study on long-term guarantees”. 1
1
See Munich Re Knowledge Series “EIOPA publishes the findings of the quantitative impact
study on long-term guarantees”. Available at:
<http://www.munichre.com/de/group/focus/
solvency-ii/knowledge-series/index.html>.
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package and transitional ­measures
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The six measures were tested in various combinations in thirteen scenarios in order to quantify the impact of
different interest-rate curves according to the standard formula as at 31
December 2011. As a result, EIOPA
proposed the LTG package, even
though there were some points that
EIOPA had not clarified at this stage.
The LTG package included a volatility balancer (to replace the CCP),
classic matching adjustment, and
extrapolation. Further, the transitional measures on risk-free interest
rates and technical provisions and
the extension of recovery period were
part of the transitional agreement.
Figure 1: Interest-rate curve and extrapolation
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The Omnibus II Directive, published
in the Official Journal of the European Union in May 2014, finally
adopted the following LTG measures,
which will be described in the next
sections.
−−Yield-curve extrapolation
−−Volatility adjustment
−−Matching adjustment
−−Extension of recovery period
−−Transitional measures on interest
rates and technical provisions
While this chapter describes the
­permanent measures of the LTG
package (i.e. extrapolation, volatility
adjustment, matching adjustment,
and extension of recovery period),
chapter 3 discusses the transitional
measures of the LTG package and
other transitional measures formulated in Omnibus II.
2.2 Yield curve extrapolation
The yield curve shows the level of
interest rates for different maturities.
Yield curves are built from market
prices of financial instruments by
using an interpolation method.2 For
longer durations, the yield curve cannot be derived directly from financial
instruments, but has to be extrapolated to a long-term yield level. The
extrapolation impacts the evaluation
2
In general, a yield curve can be derived by different methods, and is basically a curve-fitting
problem which uses interpolation and extrapolation techniques.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 years
EUR Spots (derived on the basis of interest rate swap rates)
Basic RFR (after CRA)
Extrapolated (Smith-Wilson, LLP 20, UFR@60)
of long-term liabilities (e.g. life products) in particular. The following
principles for a Solvency II yield
curve should be applied to all currencies, if possible.
35 basis points (cap). The EUR-yield
curve can be used as a basis for
pegged currencies if the conditions
of Art. 48 of the Delegated Acts
are met.
The observed financial instruments
should be traded in markets which
are deep, liquid and transparent.3
The interest-rate curve should be
derived on the basis of interest-rate
swap rates. For markets where no
swap rates exist, government bonds
should be used.
For longer maturities, where liquid
financial instruments are not available, the long-term range of the yield
curve is determined by extrapolation
based on forward rates.4 According
to the LTG package, the last liquid
point (LLP) for the Euro is at year 20.
The extrapolated curve converges
over a period of 40 years to the ultimate forward rate (UFR) of 4.2%.
The UFR should be stable over time
and not include a term premium to
reflect the additional risk of holding
long-term investments.5 The UFR
is derived from assumptions on the
long-term interest rate and inflation
rate, and will be provided by EIOPA.
The derived interest-rate curve (EUR
Spots) should be adjusted by the
credit risk in order to obtain the basic
risk-free rate (basic RFR). The credit
risk adjustment (CRA) should be
determined on the basis of the difference between rates capturing the
credit risk reflected in the floating
rate of interest rate swaps and overnight indexed swap rates of the same
maturity. The calculation is based on
50% of the average of that difference
over a time-period of one year; it
should not be lower than 10 basis
points (floor) and not higher than
3
Art. 77a Directive.
Figure 1 shows an illustrative example of the derivation of the interestrate curve and the extrapolation.
4
The Smith–Wilson method should be used for
the interpolation between the data points and
the extrapolation beyond the LLP.
5
Art. 46 and 47 Delegated Acts.
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For other currencies, the characteristics of the local bond and swap markets should be taken into account
when determining the LLP and the
appropriate convergence period to
the UFR.
Figure 2: Interest-rate curve – applying volatility adjustment
2.3 Volatility adjustment
3,0
The volatility adjustment aims to prevent pro-cyclical investment behaviour (avoidance of “forced sales”) by
mitigating the effect of an extreme
widening of bond spreads in stressed
market conditions. In addition to
forced sales, pro-cyclical behavior
could influence the asset-management strategy (e.g. a switch from
long-term to short-term assets) and
reduce the insurers’ traditional role
as a stabiliser of market volatility.
2,5
The volatility adjustment replaces
the former countercyclical premium
(CCP), which was tested in the
LTGA. Basically, it is an adjustment
of the risk-free curve by addition of a
constant spread. This spread is
derived from the difference between
the interest rates that can be earned
from a reference portfolio and the
basic risk-free rate for each currency.
Additionally, if market spreads are
very wide in a country, a conditional
country spread could be added to the
currency spread.
The reference portfolio for each currency and each country is defined by
EIOPA, and includes different assets
typically held by insurers to cover the
best-estimate liabilities.6 These are
bonds, including securitisations,
equity and property. If applicable,
publicly available indices should be
used.
6
Art. 49 Delegated Acts.
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1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 years
EUR Spots (derived on the basis of interest rate swap rates)
Basic RFR (after CRA)
Adjusted RFR (after CRA and volatility adjustment)
Extrapolated (Smith-Wilson, LLP 20, UFR@60)
For the calculation of the spread, the
portfolio is divided into two classes:
government bonds, and non-government bonds, including loans and
securitisation. The (portfolio) spread
can be calculated by using the portfolio weights and the average
spreads of the two components.7 The
spread should be corrected in order
to remove the portion of the spread
that is attributable to a realistic
assessment of expected losses,
­unexpected credit risk, or any other
risks of the assets.8
Based on the derived and risk-corrected spreads, the volatility adjustment can be calculated by means of
the following formula:9
Volatility adjustment =
65% (CuS + maxif CoS>100bps (CoS – 2 • CuS;0))
7
Art. 50 Delegated Acts.
8
For more details on the concept of the spread
correction, also known as fundamental spread,
please refer to the section about the matching
adjustment.
9
Art. 77d Directive.
It consists of two components, the
risk-corrected Currency Spread
(CuS) plus a conditional risk-corrected Country Spread (CoS), which
are calibrated at 65%. Therefore, the
volatility adjustment is normally 65%
of the CuS. A calibrated CoS can be
added only in exceptional circumstances, when the spreads in a particular country are very wide. Preconditioned that the CoS is higher than
100 basis points, the difference
between the risk-corrected country
spread and twice the risk-corrected
currency spread can be added.
Figure 2 shows an illustrative example of the effect of a volatility adjustment on the yield curve. Note that
the yield curve is extrapolated after
accounting for the volatility adjustment.
The implementation of a volatility
adjustment should be allowed by the
national supervisory authorities.
However, some Member States may
require prior approval. In exceptional
circumstances, the volatility adjustment can be rejected by the supervisor. The impact of the volatility
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adjustment on the financial position
of a company should publicly disclosed in order to ensure transparency.
Figure 3: Interest-rate curve – applying matching adjustment
2.4 Matching adjustment
The matching adjustment is a constant addition to the risk-free curve
for portfolios where the obligation
and the assigned asset portfolio can
be identified, organised and managed separately from other activities
of the undertaking.10 Figure 3 shows
an illustrative example of the effect
of a matching adjustment on the
yield curve. Unlike the approach of
the volatility adjustment, the matching adjustment is added to the yield
curve after extrapolation.
A combination of matching adjustment and volatility adjustment or
transitional measures is not permitted. It is especially appropriate for
life-annuity products with their
extended maturities, but also applicable to non-life annuities. The
matching adjustment will link the
interest rate to discount a liability to
the credit-risk-adjusted yield earned
on the assets backing those liabilities.
Thus, the matching adjustment is
calculated by the following formula:
Matching adjustment =
market rate of assets – risk-free rate
– fundamental spread
The difference of the market rate of
assets and the corresponding riskfree rate is adjusted by the fundamental spread. The fundamental
spread reflects the probability of
default of the assets (based on longterm statistics) and the expected loss
resulting from downgrading the
assets. The fundamental spread for
exposures to Member States’ central
governments and central banks shall
be no lower than 30% of the longterm average of the spread over riskfree interest rate of assets of the
same duration, credit quality and
10 Art.
77b Directive.
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1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 years
EUR Spots (derived on the basis of interest rate swap rates)
Basic RFR (after CRA)
Extrapolated (Smith-Wilson, LLP 20, UFR@60)
RFR after matching adjustment
asset class as observed in financial
markets. For all other assets, it shall
be no lower than 35%.
The matching adjustment for noninvestment-grade assets shall not
exceed the adjustment for investment-grade assets with otherwise
similar characteristics. Therefore, to
ensure this happens the fundamental
spread shall be increased where necessary. The impact of the matching
adjustment on the financial position
should be publicly disclosed in order
to ensure adequate transparency.
There are restrictive conditions on
the underlying business (insurance
obligation) and assets. Table 1 summarises the eligibility criteria for
insurance obligations and assets
according to Art. 77b of Omnibus II.
Additionally, the application of such
a matching adjustment is subject to
prior approval by the supervisor.
Once approved, it applies at all times
and not only during stressed market
conditions. This means, in particular,
that the matching adjustment could
become negative in times of
extremely low spreads.
2.5 Extension of recovery
period
The financial crisis has shown that
certain adverse situations may last
longer than expected, and that
increased flexibility on the side of the
supervisors might contribute to
greater stability in times of financial
distress. Therefore, Omnibus II
allows supervisory authorities to
extend the recovery period by a maximum of seven years, where appropriate, if an exceptional situation has
been declared by EIOPA after consultation with the European Systemic Risk Board (ESRB). Under normal circumstances, the time period
for recovery is six months from the
observation of non-compliance with
the solvency capital requirement.
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Table 1: Eligibility criteria for applying a matching adjustment
Insurance Obligations
Assets
−− The obligations to which the matching
adjustment (MA) is applied and the
assigned portfolio of assets are identified, organized and managed separately
from other business
−− Similar cash-flow characteristic to cover
the best estimate liabilities; assignment
maintained over the lifetime of the obligations except for the purpose of maintaining replication where cash-flows have
materially changed
−− Applicable for life insurance obligations
and non-life annuities
−− No future premium payments in underlying business
−− Only underwriting risks connected to the
obligations are longevity, expense, revision and immaterial mortality risk
−− If mortality risk is included the BE liability does not increase by more than 5%
under the mortality shock (SCR calculation)
−− Only option for policyholder is to surrender and the surrender value may not
exceed the value of the assets covering
the obligation at the time the surrender
option is exercised
−− Every insurance obligation has to be
taken into account entirely when composing the portfolio of insurance obligations, i.e. no splitting into parts that do
fulfill and parts that do not fulfill the
requirements, the obligation in total has
to comply
According to Art. 138 (4) of the
Omnibus II Directive, an exceptional
adverse situation exists when one or
more of the following conditions are
present:
−−a fall in financial markets which is
unforeseen, sharp and steep,
−−a persistent low-interest-rate environment,
−−a high-impact catastrophic event.
EIOPA and the supervisory authorities concerned should assess the situation on a regular basis. The
affected undertakings are required
submit a progress report on a
­quarterly basis.
−− The assets covering the obligations cannot be used to cover losses arising from
other activities
−− Replication of liability cash-flows in same
currency
−− Any mismatch does not give rise to any
risks which are material in relation to the
risks inherent in the insurance business
to which the MA is applied.
−− Cash-flows fixed and cannot be changed
by the issuers of the assets or any third
party, but:
−− Cash-flows with dependence on inflation
qualify if covering obligations depend on
inflation
−− If issuers or third parties have the right to
change the cash flows of an asset in such
a manner that the investor receives sufficient compensation to allow it to obtain
the same cash flows by re-investing, the
right to change the cash flows shall not
disqualify the asset for admissibility
3 Transitional measures
Omnibus II defines a set of transitional measures to allow for a smooth
progression from the current solvency regime to Solvency II. Unlike
those measures of the LTG package
described above, the relaxation of
requirements achieved by these
arrangements only applies for a certain period, or is phased out over
time. While some of these measures
result in a better solvency position,
others aim to give undertakings more
time to fulfil certain requirements. In
sum, these relaxations aim to put
insurance companies in a position to
be able to comply with the full spectrum of Solvency II requirements
over time.
3.1 (Re)insurance
undertakings in run-off or
in administration
This transitional measure is applicable to undertakings in run-off or in
administration, and aims to avoid
these companies losing their authorisation in case of non-compliance
with the minimum capital requirements.11 Undertakings in run-off
should ensure the settlement of policyholder claims. However, the loss of
authorisation in case of non-compliance would impose unnecessary
costs on the undertakings, and as
such contradict with this goal.
Undertakings qualify for the transitional measure if one of the following
conditions are met:
−−The undertaking has to end its
business before 1 January 2019.
Should the undertaking’s effort in
the run-off process raise any
doubts about the termination of the
business, the undertaking will not
be exempted from the requirements formulated in Titles I-III of
the Directive. To be more precise,
the undertaking has to comply with
all requirements once the violation
of the termination condition is
declared by the supervisor or after
1 January 2019 at the latest.
−−The exemption may also be applied
to undertakings in reorganisation.
In this case, the termination of
existing activities has to be completed by 1 January 2021. Similar to
the case above, the exemption may
be cancelled if the supervisory
authority is not satisfied with progress in the termination process.
11
According to Art. 308b (1.-4.) Omnibus II,
re(insurance) undertakings in run-off or
administration can be granted an exemption of
the requirements formulated in Titles I-III of
the Directive, covering “General rules on the
taking-up and pursuit of direct insurance and
reinsurance activities”, “Taking-up of business”
and “Supervisory authorities and general
rules”.
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(Re)insurance undertakings that
apply this transitional measure are
obliged to inform their supervisory
authority beforehand. Further, the
undertaking has to submit an annual
report that enables the supervisory
authority to evaluate the progress
made by the undertaking in terminating its activities.
reduced by two weeks per year for
the next four years, so the initial submission period of 14 weeks14 applies
for all financial years ending on or
after 30 June 2019.
transitional measure, reference is
made to our Knowledge Series
“Omnibus II brings more clarity:
­Transitional measures for own
funds”.17
Further, the suspense period for
information that has to be submitted
to the supervisory authority on a
quarterly basis will be eight weeks
for any quarter ending on or after
1 January 2016. This period will be
reduced by one week per financial
year, resulting in a final submission
period of five weeks for quarter endings on or after 1 January 2019.15
3.4 Market risk
In order to take into account the
complexity inherent to group level
reporting, Omnibus II allows for an
extension of the above-mentioned
deadlines by six weeks, respectively.
−−The standard parameters defined
in the concentration and spread
risk sub-modules, and applied to
debt issued by European Economic
Area (EEA) states’ central governments or central banks denominated and funded in the domestic
currency of another EEA state, will
effectively be zero until 2017. As of
2018, the standard parameter will
be phased in, with a reduction by
80% (in 2018) and 50% (in 2019)
respectively. The full stress will be
applied as of 2020.18
Companies belonging to a group
may not make use of this measure
unless all group companies are in
run-off. In order to support the
exchange of information between
Member States, each Member State
should share the names of the undertakings applying this transitional
measure with other Member States.
3.2 Submission of
information to supervisory
authority
For many insurance companies,
compliance with the various reporting formats is proving to be a major
challenge. The EIOPA guidelines on
“Submission of information to
national competent authorities”
­published in October 2013 already
addressed this issue by requiring
undertakings to prepare first reporting formats in the preparatory phase
(i.e. in 2015). Omnibus II eases the
reporting requirements by temporarily extending the suspense period.
To be more precise, for the financial
year ending on or after 30 June 2016
but before 1 January 2017, information that has to be provided to the
supervisory authority at least annually12 and the report on solvency and
financial condition13 may be submitted no later than 20 weeks after the
undertaking’s financial year ends.
The submission period will be
12
Art. 35 Directive.
13
Art. 51 Directive.
3.3 Own funds
The strict application of the criteria
for basic own fund items as of January 2016 could force a variety of
undertakings to replace existing capital instruments at the same time. In
order to avoid the market dislocation
and the related costs for undertakings, Art. 308 b (9-10) of the Omnibus II Directive allows for transitional
own fund measures. The UK country
report on the fifth quantitative
impact study underlines the importance of these transitional measures
for the UK industry.16
Under the transitional arrangement,
basic own fund items which were
issued before the earlier of (a) 1 January 2016 or (b) the date of entry into
force of Delegated Acts, may be
accounted for as transitional own
fund items if they qualify as own
fund items under the existing Solvency I regime, and do not qualify as
a regular Solvency II basic own fund
item. The grandfathering rule may
be applied for a period of up to ten
years. For a detailed analysis of this
14
Art. 312a and Art. 312c Delegated Acts.
15
Art. 312d Delegated Acts.
16
See: FSA UK Country Report: The Fifth
­Quantitative Impact Study (QIS5) for
Solvency II, March 2011.
Omnibus II foresees a temporary
reduction of stresses applied to certain asset classes in order to avoid
market disruptions. These relaxations aim to reduce the solvency capital requirements for these modules
in the first years after introduction of
Solvency II.
−−Further, according to Art. 308b (13)
of Omnibus II in conjunction with
Art. 173 of the Delegated Acts, the
stress applied on Type 1 equities19
other than duration-based equities
purchased before 1 January 2016
can be phased in over seven years.
The stress will increase, at least on a linear basis, from 22% in 2016 to
the full stress equal to 39% and the
symmetric adjustment in 2023.
17
See Munich Re Knowledge Series “Omnibus II
brings more clarity: Transitional measures for
own funds”. Available at: <http://www.
munichre.com/site/corporate/get/documents_
E786737397/mr/assetpool.shared/
Documents/5_Touch/_Publications/
302-08331_en.pdf>.
18
Art. 308b (12) Omnibus II Directive.
19
These are equities listed in regulated markets
in the countries which are members of the EEA
or the Organisation for Economic Cooperation
and Development (OECD). Further, Art. 168 (6)
Delegated Acts provides a list of instruments
which should be classified in any case as Type
1 equity.
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−−(Re)insurance undertakings may
only invest in tradable securities,
and other financial instruments
that are based on repackaged loans
and were issued after 1 January
2011, if the originator, sponsor or
original lender retains a material
net economic interest of at least
5%.20 In addition, Art. 256 of the
Delegated Acts summarises the
qualitative requirements for investments in securitisation. A breach of
these requirements may be penalised by an increase in the solvency
capital requirement.21 However, for
those instruments issued before
1 January 2011 these requirements
must only be fulfilled if new exposures were added or substituted
after 31 December 2014.
3.6 Internal models
3.5 Non-compliance with
solvency capital requirements
According to Art. 308b (14) of the
Omnibus II Directive, undertakings
that do not comply with solvency
capital requirements in 2016, but at
the same time do comply with the
Required Solvency Margin applicable
under the Solvency regime before
Solvency II enters into force, may be
allowed to restore their solvency
position by 31 December 2017. However, the respective undertakings are
required to submit a progress report
every three months, proving that
­significant progress has been made.
This transitional measure allows
undertakings with an inadequate
Solvency II position to thoroughly
analyse and compare the adequacy
of different measures.
Groups may apply for the approval of
an internal group model that is applicable only to a part of that group until
31 March 2022, provided that (a) the
ultimate parent undertaking and the
respective part of that group are
located in the same Member State,
and (b) the risk profile of that part of
the group differs significantly from
the rest of the group. Note that the
application of this transitional measure is at the discretion of the national
supervisory authority.22
3.7 Risk-free interest rates
Art. 308(c) of the Omnibus II
­Directive allows for an adjustment of
risk-free interest rates that may be
applied to (re)insurance obligations
concluded before 1 January 2016,
subject to prior approval by their
supervisory authority. The adjustment is equal to the difference
between the interest rate as determined under Solvency I at the last
date at which Solvency I is in force,
and the annual effective rate as
determined under Solvency II. Those
undertakings that apply the volatility
adjustment have to account for the
volatility adjustment before performing the described adjustment. The
adjustment will be fully taken into
account at the year-end 2016, i.e.
when insurance undertakings disclose their solvency position for the
first time after Solvency II comes into
force. In the following years, the
adjustment will decrease in a linear
manner until the benefit vanishes at
the year-end 2032.
Further, please note that this measure may neither be combined with
the matching adjustment described
in chapter 2 nor with the transitional
measure on technical provisions
described in the next section.
3.8 Technical provisions
As an alternative to the transitional
measure on the risk-free interest rate,
undertakings can seek approval for a
transitional deduction to technical
provisions which has to be applied at
the level of homogenous risk groups,
i.e. segments which are used for
reserving.23 The transitional deduction is equal to the difference of (a)
technical provisions net of recoverable from reinsurance and special purpose vehicles as prescribed under
Solvency II, and (b) technical provisions net of recoverable from reinsurance as prescribed under Solvency I.
Similar to the transitional measure
on risk-free interest rates, the deduction will be fully applied in 2016 and
reduced in a linear manner to 0% in
2032. It may be combined with the
volatility adjustment, but not with the
matching adjustment. Also, the solvency position without the application of the transitional measure has
to be publicly disclosed. However, in
cases where the undertaking would
not comply with solvency capital
requirements without using the transitional measure, the undertaking
has to provide an annual report to the
supervisory authority that lays down
the measures taken to restore the
solvency position, and the progress
made.
In order to maintain policyholder
­protection, public disclosure must be
made with and without the application of the transitional measure on
the risk-free interest rate.
In cases where the application of this
transitional measure results in solvency requirements less than those
prescribed by Solvency I, the supervisory authority may reduce the deduction.
22 Art.
23 Art.
20 For
more information on the requirements for
retentions, please refer to Art. 254 Delegated
Acts.
21
Art. 257 Delegated Acts.
308b (16) Omnibus II Directive.
308c Omnibus II Directive.
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4 Summary
The LTG package and the transitional measures are intended to pave
the way for a smooth introduction of
Solvency II in 2016. While the spectrum of instruments covers many
challenges faced by insurance companies, it remains to be seen how
many insurers effectively will make
use of these instruments. Firstly, the
effectiveness of the measures under
the economic conditions prevailing
at the start of Solvency II has to be
considered. Secondly, the application
comes with a ‘price’ in the form of
restrictive prerequisites, e.g. disclosure of Solvency II positions must be
made with and without the instrument or, in some cases, no possibility
to revert back from the implementation. The pros and cons of an application have to be thoroughly balanced.
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Solvency Consulting shares knowledge and offers services regarding
quantitative and qualitative risk
management from both the management and regulatory perspective.
Despite offering knowledge and
expertise, we provide assistance with
solutions in the area of capital management and capital optimisation.
© 2014
Münchener Rückversicherungs-Gesellschaft
Königinstrasse 107, 80802 München, Germany
Order number 302-08521
Münchener Rückversicherungs-Gesellschaft
(Munich Reinsurance Company) is a reinsurance
company organised under the laws of ­Germany.
In some countries, including in the United States,
Munich Reinsurance Company holds the status
of an unauthorised reinsurer. Policies are underwritten by Munich Reinsurance Company or its
affiliated insurance and reinsurance subsidiaries.
Certain coverages are not available in all jurisdictions.
Not if, but how
Any description in this document is for general
information purposes only and does not constitute an offer to sell or a solicitation of an offer to
buy any product.