Solvency II will soon be a reality in Europe. Insurers will report unprecedented levels of detail on their activities to their domestic regulator. European regulators will, in turn, submit data to Eiopa to analyse trends and results. Eiopa will also organise supervisory colleges where insurance regulators can share plans and organise cross-border discussions based on the new data.
Legions of consultants from information technology, accounting and actuarial companies now offer fully developed products and practices to support compliance. There are multiple discussion groups on the subject and some recruiting companies are totally focused on placing Solvency II professionals.
The influence of Solvency II as a sea-change in the international insurance regulatory environment is occurring both within the EU and beyond. Bermuda, Japan, South Africa, Australia and other countries have set in motion or have instituted principles-based solvency oversight regimes. The National Association of Insurance Commissioners in the US is presently undertaking a project to re-examine its state-based solvency regime and has travelled to Frankfurt to offer assistance in data gathering and design.
The International Association of Insurance Supervisors is moving rapidly to evolve its insurance core principles to include more sophisticated compliance elements. In 2005, Eiopa (and its predecessor, Ceiops) invited insurers to participate in a series of five “practice runs” : the Quantitative Impact Studies (QIS). The QISs gave regulators data to fine-tune calibration, asset valuation and other issues.
Most interesting for IT insurance experts were comments about the quality of the data itself – regulators could not be sure they were comparing “apples to apples” and worried year-to-year data might vary. It sounds like a case for data standards to me. READ MORE