What do I report?
As mentioned in the previous Blog Post, even firms that begin reporting during the Solvency II preparatory phase will notice a hefty increase in the number of templates they need to complete when full scope reporting arrives in January 2016.
Quantitative and qualitative reporting
Solvency II Pillar 3 brings a huge increase in the amount of data that needs to be reported. For example, for the first time detailed asset data must be included. Firms will also need to take into account a new set of reporting requirements, relating to both quantitative and qualitative disclosures. Under Pillar 3, the main focus is on two particular reports, which require both qualitative and quantitative data:
- SFCR – Solvency and Financial Condition Report
- RSR – Report to Supervisors
Public vs private reporting
Reporting also occurs on two levels – public and private. For example, a few of the quantitative templates and qualitative data will be made public in the SFCR, whereas all quantitative templates and a detailed set of qualitative data must be reported privately to the regulator in the RSR.
The frequency with which both the narrative reports and the quantitative reporting templates are to be submitted also varies. For example, in the UK the PRA requires Public qualitative narrative reports to be submitted annually, whereas Private qualitative narrative reports can be submitted annually, but in summary form, though they must be sent in full every three years. Public quantitative reporting templates are to be submitted annually, whereas Private quantitative reporting templates are required both quarterly and annually. National Specific templates (NSTs) are submitted privately on an annual basis. [Source: PRA]
Solvency II Pillar 3 reporting contains a large number of templates, and filers need to know which templates relate to their individual situation. Under the EIOPA Delegated Acts, some firms may even be exempt from submitting quarterly or annual reports, for example the List of Assets and Open Derivatives. NCAs can waive quarterly reporting partially or entirely, and also some of the annual reporting for smaller undertakings. Exemptions are based on the scale, nature and complexity of the risk profile of undertakings and their investment funds.
QRTs in XBRL
All Quantitative Reporting Templates (QRTs) must be submitted in XBRL format. These include Balance Sheet, Asset list, Own Funds, Premium Claims & Expenses, Variation analysis, SCR & MCR, Technical provisions, Reinsurance and Group Reporting. It should be noted that although these represent different templates, they all form part of a single XBRL report.
Narrative reports, such as Business and Performance, System of Governance, Risk Profile, Valuation for Solvency Purposes and Capital Management, may be submitted in another electronic format, e.g. PDF.
Filers have a lot to consider when determining the data that should be reported. Next time, we’ll explore how the reports are created and submitted.