1. Global Association of Risk
Professionals
The countdown to
Solvency II
Μυρτώ Χαμπάκη
Υπεύθυνη Οικονομικών Θεμάτων
& Κλάδου Ζωής Ε.Α.Ε.Ε
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2. Target Implementation Dates
2012 2014 2015
31-10-2012 1-1-2014 1-1-2015 +
X ?
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3. Delay Factors
• Many outstanding issues :
– IM’s
– ORSA
– Groups
– QRT’s
• Involvement of high level political
instruments:
– European Commission
– European Council
– European Parliament
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4. Solvency II and the European State
Debt Crisis
• “All inclusive” Risk Framework
• Emerging risks arising from the turbulence
in European and global economy (MKT
risk)
• Difficulties in financing additional capital
• Conflicting interests
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5. Solvency II – Omnibus II
A vicious circle
Omnibus II Omnibus II as a
scope vehicle for Solvency II
revisions
Omnibus II and supervisory powers for
concluding Solvency II - Level II measures
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6. Trialogue and Impact Assessment
(IA) – QIS5+
European
Parliament
European European
Commission Council
European
Supervisors Insurance Market
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7. CCP, Matching Adjustment,
Extrapolation of Risk Free Curve
Counter Cyclical Premium (CCP) – reduces the discount rate used
to value liabilities in times of excessive market volatility. Temporary
measure that applies to all liabilities in the portfolio (other than those
benefiting from a matching premium). The CCP will be introduced by
EIOPA.
Matching Premium (MP) – reduces the amount of capital that needs
to be held for long-term liabilities that are ‘matched’ by a portfolio of
assets with similar duration and cash flows. This is to be a
permanent measure that can only be applied to specific assets and
liabilities that meet a strict set of criteria.
Extrapolation of the risk-free interest rate where market data is no
longer considered deep, liquid and transparent.
IA conclusions to be published by the end of March 2013
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8. Solvency II and Pillar III
• Article 51 of Solvency II Directive
• SFCR and QRT’s
• Principles of materiality and proportionality
• Reporting of any alteration in capital
circumstances
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9. Solvency II and Pillar III
Solo Groups
48 supervisory reporting 29 supervisory reporting
templates annually templates annually
(20 quarterly) (13 quarterly)
11 templates for public 7 templates for public
disclosure disclosure
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10. Solvency II and Pillar III
The criticism
• Heavy work load
• Complicated requirements
• Costly
• IT resources
• Is there an “actual” purpose ?
• Many delays in finalization of reporting specs
• What about “competition” data?
• Will the customer understand ?
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11. Over-complexity or … prudency
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