Solvency II Workshop 11 th August 2016 Gibraltar Financial Services Commission

Contents Brief recap on EIOPA activity since implementation of the legislation in January What is coming up over the next 6-12 months. Overview of data analysis with respect to EIOPA and GFSC key metrics. Key observations from data quality assessment. Recap on validation process and how to diagnose results. Q&A.

Gibraltar Financial Services Commission Reporting Specific GFSC Publications Preparatory Phase Reporting FAQ – July 2015 – Explained some of the common issues faced by firms reporting under the SII Preparatory Phase. Solvency II Workshop - September 2015 – Focussed on the overall SII filing process with useful links to various EIOPA publications. Solvency II Reporting Procedures and Common Errors – August 2016 – Details the user and template configuration process. – Sets out how Invoke specific processes such as approval, extraction and resubmission. – Discusses common validation errors found by firms and provides guidance on how to resolve them.

Gibraltar Financial Services Commission EIOPA Activity Since January 2016 “Without a risk-based approach the European insurance supervision would be lagging behind international trends. Now with Solvency II a modern, robust and proportionate supervisory regime will be implemented. This is a huge step forward for enhanced policyholder protection and the single European insurance market.” - Gabriel Bernardino, Chairman of EIOPA

Gibraltar Financial Services Commission EIOPA Activity Since January 2016 In February 2016, EIOPA released ‘Governance of Taxonomy Releases and Schedule 2016’ which sets out the overall plan for taxonomy updates and contains useful information for filers who will also need to plan around these changes.‘Governance of Taxonomy Releases and Schedule 2016’ The key message from this document was that it is expected that the taxonomy will be updated once annually in a ‘regular’ year. Where no changes are required, no updates will be released.

Gibraltar Financial Services Commission EIOPA Activity Since January 2016 Where changes are required, two types of change may occur, an ‘adaptive publication’ or a ‘corrective publication’, a maximum of one a year. An ‘adaptive publication’ is needed in case of business changes due to a new reporting framework, or amendments to the existing ITSs or EIOPA Guidelines; it may include also new checks and/or taxonomy architectural changes bug fixing. The ‘corrective publication’ will only include corrections to serious defects in the implementation or corrections to defects without impact in the report generation process, but no new business requirements. Both of these types of publications have timelines, as set out in the document, that filers can follow to ensure compliance with the latest taxonomy release. One such ‘adaptive publication’, namely 2.1.0, has already been proposed with Gibraltar included as ‘United Kingdom (Gibraltar)’. We therefore expect that firms will be able to report using ‘GI’ as a ‘Country of Authorisation’ when preparing their annual QRTs in June 2017.

Gibraltar Financial Services Commission The Next 6-12 Months Annual QRTs – the largest set of templates in the EIOPA reporting schedule. Firms encouraged to create and prepare for annual reporting using templates made available for each on Invoke. Further tailored configured to take place over coming months with firms expected to review templates and their obligations to file them. Extended reporting for Protected Cell Companies (SR Templates) and RFF/MAP. Per cell breakdowns of key information to provide information necessary for supervision. Solvency and Financial Condition Report templates Public disclosure of templates as per Article 51 of the Solvency II Directive and the Guidelines on Reporting and Public Disclosure. Firms should work towards ensuring that this information can be made readily available online as per Article 301 of the Delegated Act.Solvency II Directive Guidelines on Reporting and Public DisclosureDelegated Act Regular Supervisory Report First return to be submitted to the GFSC alongside annual QRTs via .

Gibraltar Financial Services Commission Overview of Data Analysis Entities reporting under Solvency II covering 4 entry points (d1s/qrs/d1g/qrg). 119 XBRL files received over 117 days. Received 114,943 distinct pieces of information (reported facts) from our filers to date. Returns were subjected to secondary validation to ensure full compliance with both EIOPA and GFSC validations. Most common errors found during this process related to reporting currency and asset data. Further GFSC validations used to check returns against supervisory data e.g. Approvals regarding USPs/Internal Models.

Gibraltar Financial Services Commission Data Quality Assessment – Key Observations Reporting Currency Over 11,000 errors relating to the same overall issue received by the majority of firms. This is due to the same error arising on a line by line basis wherever this caused a validation failure. Main theme was that firms using Invoke to file were not checking their ‘Context’ tab and amending the currency to be consistent across all monetary templates. Further to a GFSC change request our Invoke e-Filing Portal now defaults to ‘GBP’ which will reduce future instances of this error. This change only affects templates created since the change so please delete and create any old templates previously prepared in order to avoid this issue.

Gibraltar Financial Services Commission Data Quality Assessment – Key Observations Asset Data One other significant issue with the quality of data received was when firms did not follow the instructions provided for the completion of each template. The EIOPA LOG files are complemented by instructions in the Invoke interface. We can see on the picture below that on the left hand side each row has been numbered and a specific code used when it is attributed by the undertaking. On the right hand side rows are not numbered and no ‘CAU/’ prefix is used and as such this data is incorrectly presented and will result in a resubmission request.

Gibraltar Financial Services Commission Submissions - The Validation Process There are some key concepts regarding validation which must be understood in order to accurately diagnose errors during the validation phase of the submission process. Business validations: are the explicit structured business data checks defined by EIOPA’s business experts and which must be approved by relevant business working groups and EIOPA’s Board of Supervisors. E.g.: BV330_1 {r1000}={r0500}-{r0900}, with the error message: The item "Excess of assets over liabilities" is different from the "Total assets" minus "Total liabilities". Technical validations: are explicit or implicit structured data checks defined by the Taxonomy team. These technical validations are not including new business requirements but ensuring that existing business requirements or the necessary technical requirements are met.

Gibraltar Financial Services Commission Submissions - The Validation Process These technical validations normally are consequences of the technical implementation, meaning they relate solely to EIOPA’s XBRL extended taxonomy beyond those used in other forms of reporting. There are two main categories: Technical validations implemented as XBRL assertions: these are part of the List of Validations and are implemented within the taxonomy (normally with XBRL assertions). Examples of technical validations are: the ISIN code is properly formatted (Start with two letters) or the filing indicators are aligned with the business content template (S.01.01). Technical validations defined as Filing Rules: these are guidelines and rules defined in a single public document. Filing Rules detail additional technical constraints on the generation of XBRL reports that cannot be imposed by a taxonomy. Rules are categorised according to their severity. MUST rules are mandatory.

Gibraltar Financial Services Commission Invoke Validations Value does not comply with pattern Literal string is case sensitive Conditional validation across fields

Gibraltar Financial Services Commission EIOPA Filing Rules

Gibraltar Financial Services Commission GFSC Validations In conducting its review of each return, the GFSC checks the data submitted against reference data held on the firm. An example of this is confirming the Legal Entity Identifier (LEI) code. In this example, the Basic Information template is checked to ensure that the LEI reported matches the one that we have configured for the firm via the Invoke portal. A secondary check is then performed against the Global LEI Index.

Gibraltar Financial Services Commission Q & A