With Solvency II now live, what more needs to be done by insurers to embed the processes and systems that have been developed?
What more needs to be done to embed the processes and systems that have been developed?
Despite Solvency II now being live, the insurance industry still faces a number of challenges.
Over the coming months, further communication is expected from Europe and the PRA on a number of areas, including national regulatory reporting requirements, transitional measures, third country branches, third country equivalence, and assurance and audit requirements.
Firms have spent a great deal of time and resources on implementing Pillar 1 and Pillar 3 compared to Pillar 2. However, there is still work to do to ensure the processes are fully formalised and embedded, including finalising the governance and controls in place to maintain continued compliance with Solvency II on an ongoing basis. Boards (especially Non-Executive Directors) will need to understand and be able to articulate how they provide the oversight and monitoring required to ensure the firm is compliant with Solvency II. The PRA are particularly interested in governance at a high level (board and involvement of NEDs) and how the Pillar 1 and 3 numbers are put together.
Challenges and areas of uncertainty remain for each of the key focus areas of Solvency II; Pillar 1, Pillar 3, Audit and Assurance, IMV/IMAP, ORSA and Tax. Click on the links below to find out more.