1. “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

3. 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

4. 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

5. 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

6. 2. The Supervisory Review Process (SRP)

7. 2. The Supervisory Review Process (SRP)

8. 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

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

10. 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

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