Solvency II - Update and Current Events

The European Union will soon be adopting Solvency II, a new and robust set of regulatory requirements that will shape the management and reporting of the insurance industry in Europe and beyond. Extensive requirements are being developed that will require companies to determine their capital requirements via economic models, to develop more robust procedures and controls surrounding their operations and financial reporting, and to provide more extensive and transparent disclosures to both regulators and the public.

Over the last year significant developments have been made by companies affected by Solvency II as they prepare for this “new world”. The recent quantitative impact studies have given greater clarity as to the calibration of the standard formula, while many are developing new internal capital models to better reflect their risks and take advantage of reduced capital requirements.

This session will start with an overview of Solvency II, including a description of the “three pillars” of regulatory requirements, the expected timelines and recent developments and the concept of “equivalence” of regulatory regimes in other countries – especially the impact on the US. It will then move on to the practical challenges companies are facing as they attempt to make sense of the complexities of Solvency II and translate it into real-world practices embedded throughout the organization, with particular focus on the extensive and onerous Internal Model Approval Process.