Solvency II Reporting and Disclosure 11/5/2010 Solvency II Reporting and Disclosure Tim O’Hanrahan

Overview What reports will be required? What is in those reports? 11/5/2010 Overview What reports will be required? What is in those reports? Are the reports Public or Private? Process Frequency Submission Dates Format Sign-off/Audited Groups Proportionality Open Questions 2

11/5/2010 Important Note The presentation is based on a combination of the Directive, Draft Level 2 Implementing Measures and current early drafts of Level 3 Guidance. The resulting requirements will evolve and develop over time and all undertakings should keep up to date with developments. 3

What reports will be required? 11/5/2010 What reports will be required? Art. 35 Supervisory reporting Regular Supervisory Report (RSR) -All information necessary for the purposes of supervision -Narrative Report -Quantitative reporting templates Solvency and Financial Condition Report (SFCR) - Publicly disclosed data 4

What is in those reports? i) SFCR and ii) RSR  B. Governance and remunerationpolicy C. RISK profile a. Business, External Environment and performance Sfcr AND rSR D. Valuation for solvency purposes E. Capital management 5

Contents of SFCR and RSR A) Business, External Environment and Performance B) Governance and Remuneration Policy C) Risk Profile Business and external environment Underwriting Performance Investment Performance Performance from other activities Governance Arrangements Fit and Proper Risk Management & ORSA Internal Control Internal Audit Actuarial Outsourcing Any other disclosures Following risks Underwriting Risk Market Credit Liquidity Operational Other material Risk Exposures 6

Contents of SFCR and RSR D) Valuation for Solvency Purposes E) Capital Management Assets Technical Provisions Other Liabilities Other Disclosures Own Funds - structure, amount & quality MCR and SCR SCR differences if standard formula or internal model used Non-compliance with SCR/MCR 7

What do you disclose for Underwriting Performance? SFCR (Public) RSR (Private) The undertaking’s underwriting performance by material line of business and geographical area; The undertaking’s underwriting expenses by material line of business and geographical area over the year and compared to the prior year. A discussion and analysis by the administrative, management or supervisory body of the undertaking’s overall underwriting performance; Details of the undertaking's underwriting performance by line of business against plan, and significant factors affecting deviations from plan; Projections of the undertaking's underwriting performance over the business planning period with details of significant factors that might affect underwriting performance; Details of any reinsurance, ART and finite reinsurance programmes purchased, including those currently not being claimed on. 8

Contents of SFCR and RSR And also... Quantitative forms Current draft, 59 different forms!!! Including forms on: Profit and Loss Account Balance Sheet Off Balance Sheet Solvency Capital Requirement List of each investment held List of each derivative Technical Provisions Risk Profile Loss Profile All forms will be reported annually, a subset will be reported every quarter. 9

Example List of Investments Each investment held with details such as: Identification ID Code Security Type Issuer Name, Sector, Country Price & Quantity Price Valuation Method Cost Risk Section External Rating Rating Agency Underlying of Securitisation Duration

Reporting required on other occasions? 11/5/2010 Reporting required on other occasions? Predefined events Predefined events are those that can lead to material changes to an undertaking’s risk profile May require supervisory authorities to reassess the frequency and intensity of supervisory actions. Supervisory Enquiries Supervisors may request any information required to assess the situation of an undertaking 11

Are the reports Public or Private? Private for Supervisors SFCR Yes RSR No Predefined Events Yes for items such as non-compliance with MCR or significant non-compliance with SCR and no satisfactory action taken in required timeline Supervisory Enquiry Generally no but may give rise in certain circumstances to a public disclosure 12

Frequency of Reporting External auditing requirements 11/5/2010 Process of Reporting Process of Reporting Frequency of Reporting Submission dates Format of Reporting External auditing requirements 13

Process of Reporting – Frequency and Submission Dates SFCR RSR Quantitative Forms Frequency Annual 1) Full report at least every 3 years or when required by Supervisors 2) Material Updates Annually Quarterly and Annual Submission Date 14* weeks after year end Quarterly 6* weeks after end. Annual 16* weeks after year end * There is a limited extension until 2015 14

Process of Reporting –Submission Dates Due dates Year end 31/3/13 Year end 31/12/13 SFCR – Annual Narrative & Quantitative Mid July 2013 April 2014 RSR Narrative & Quantitative Quarterly Quantitative Mid August 2013 for Q1 ended 30/6/13 Mid May 2013 for Q1 ended 31/3/13 15

Process of Reporting – Frequency and Submission Dates SFCR RSR Quantitative Forms Format Common Template as developed by CEIOPS Sign off -internal – administrative or management body Yes Sign off – external auditing or verification No Yes to be developed 16

Group reporting Solvency and Financial Condition Report Report to Supervisors Quantitative Forms Group Yes Same as Single entity + additional requirements Same as Solo + additional requirements Subsidiary Could include in Group report (subject to agreement) i.e. Subsidiary would not have to complete 17

Proportionality How is Proportionality Demonstrated Regular Supervisory Reporting (RSR) Frequency of RSR is not required annually Qualitative forms Qualitative reporting and disclosure requirements are principled based Quantitative Forms You do not have to complete forms that are Not applicable 18

Open Questions Audit requirements : scope ? level of assurance ? 11/5/2010 Open Questions Audit requirements : scope ? level of assurance ? Public disclosure of some templates : which ones ? National specificities : content ? role of EIOPA ? Can local GAAP be used for Solvency II ? Proportionality : less requirements for small or less complex undertakings ? impact on comparability & aggregation of data ? “automaticity” of proportionality ? 19

Overview What reports will be required What is in those reports 11/5/2010 Overview What reports will be required What is in those reports Are the reports Public or Private Process Frequency Submission Dates Format Sign-off/Audited Groups Proportionality Open Questions 20

Thank you