Solvency II – CEIOPS issues further supervisor guidelines

This release, “Guidelines on Information Exchange between Lead Supervisors and Other Competent Authorities” is an annex to the “Role of the Lead Supervisor” released last December, and both are part of the establishment of a framework for the supervision of insurance groups across the European Union, a key process if Solvency II is to succeed. The latest guidelines establish a common list of items of information that are essential to be exchanged within each supervisory network.

Currently CEIOPS is also running a consultation exercise with the insurance industry on the impact of the standard models used to calculate solvency requirements in Solvency II - Quantitative Impact Study 3 (QIS3). The consultation was issued in April for submission of responses by the end of June and CEIOPS plans to publish its report on November 23rd. CEIPOS has also launched a working party which will seek to evolve one commonly-agreed risk assessment system for insurance groups.

Also last week, Paolo Cadoni, from the UK’s supervisor, the Financial Services Authority (FSA) and a member of its Insurance Standing Group charged with advising the UK’s implementation of Solvency II, said at a conference that, although participation in the Solvency II consultation had improved, more data was still required from smaller insurers.

“The participation rate from QIS2 to QIS3 has more than doubled,” he said at Moody’s Investors Service’s Global Insurance Conference, “We need to have more data from across Europe, especially for smaller undertakings, and we are still missing good quality data from firms using internal models. We need data from internal models to assess if standard models are celebrated correctly.”

In July, the European Commission published its Solvency II framework directive but pushed the likely implementation date back to 2012 from 2010.