Solvency ii update_garp2012

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Solvency ii update_garp2012

  1. 1. Global Association of Risk Professionals The countdown to Solvency II Μυρτώ Χαμπάκη Υπεύθυνη Οικονομικών Θεμάτων & Κλάδου Ζωής Ε.Α.Ε.Ε 1
  2. 2. Target Implementation Dates 2012 2014 2015 31-10-2012 1-1-2014 1-1-2015 + X ? 2
  3. 3. Delay Factors• Many outstanding issues : – IM’s – ORSA – Groups – QRT’s• Involvement of high level political instruments: – European Commission – European Council – European Parliament 3
  4. 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 4
  5. 5. Solvency II – Omnibus II A vicious circleOmnibus II Omnibus II as ascope vehicle for Solvency II revisions Omnibus II and supervisory powers for concluding Solvency II - Level II measures 5
  6. 6. Trialogue and Impact Assessment (IA) – QIS5+ European Parliament European European Commission Council European Supervisors Insurance Market 6
  7. 7. CCP, Matching Adjustment,Extrapolation of Risk Free CurveCounter Cyclical Premium (CCP) – reduces the discount rate usedto value liabilities in times of excessive market volatility. Temporarymeasure that applies to all liabilities in the portfolio (other than thosebenefiting from a matching premium). The CCP will be introduced byEIOPA.Matching Premium (MP) – reduces the amount of capital that needsto be held for long-term liabilities that are ‘matched’ by a portfolio ofassets with similar duration and cash flows. This is to be apermanent measure that can only be applied to specific assets andliabilities that meet a strict set of criteria.Extrapolation of the risk-free interest rate where market data is nolonger considered deep, liquid and transparent.IA conclusions to be published by the end of March 2013 7
  8. 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 8
  9. 9. Solvency II and Pillar III Solo Groups48 supervisory reporting 29 supervisory reportingtemplates annually templates annually(20 quarterly) (13 quarterly)11 templates for public 7 templates for publicdisclosure disclosure 9
  10. 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 ? 10
  11. 11. Over-complexity or … prudency ? 11

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