“Solvency II - final agreement “Solvency II - final agreement. New role and tasks for insurance supervisors” Monday 29 June 2009 PAUL WINDELS Financial Analyst CBFA Assistant to Michel Flamée

Table of contents 1. Introduction - CEIOPS stocktaking 2. The Supervisory Review Process (SRP) 3. Information Analysis in view of the SRP 3.1 Business and external environment 3.2 Quantitative requirements 3.3 Risk management system 4. Conclusion

1. Introduction need for common minimum requirements considerable differences between supervisors Stocktaking on differences in supervisory powers and objectives taking-up of business and licensing ongoing activity and compliance crisis management and insolvency proceedings rule making administrative measures and sanctioning powers

2. The Supervisory Review Process (SRP) Framework Directive - Pillar 2 Convergence of supervisory objectives Why The overall process conducted by a supervisor in reviewing (re)insurance companies on an individual basis What The SRP should be adapted to the nature, scale and complexity of risks of each company → appropriate judgment How

2. The Supervisory Review Process (SRP)

2. The Supervisory Review Process (SRP)

3. Information Analysis (SRP) 1. Business and external environment - trends on main business lines - profit areas and potential risks - external developments - financial performance - underwriting performance

3. Information Analysis (SRP) 2. Quantitative requirements - investment analysis - ALM analysis - adequacy of technical provisions - calculation of MCR and SCR - analysis of own funds

3. Information Analysis (SRP) 3. Risk management system - organisational structure and process - stress testing and scenario analyses - review of ORSA - evolving solvency needs - use of internal model

4. Conclusion Focus of Solvency II: - risk based supervision - forward-looking approach - tailored requirements And: - group supervision - dialogue and cooperation