How do I report to my NCA?

Although it remains at the discretion of the individual NCA, many regulated firms will find that they must now submit their quantitative reports in XBRL, which may be an unfamiliar format presenting a new set of challenges, particularly since there is now so much more data to be handled (at a recent conference estimates were quoted at over 10K data items for solo reporting, and 200K for group reporting during the preparatory phase, increasing to around 40K and 800K data items respectively when full scope reporting arrives in January 2016).

Integration or standalone?

How to handle the data is a key issue. Many insurers will have existing workflow and security processes in place, but must now integrate them with the less familiar requirements of XBRL preparation, validation and rendering, so both the IT department and the business will need to engage to ensure that the relevant data can be captured and turned into the required reports.

Decisions need to be made: whether to create a standalone environment or embed reporting into current architecture; whether to rely on process professionals to provide the specialist XBRL capabilities (which may be outside their core competence), or to seek help from a dedicated XBRL technology company.

Coping with XBRL taxonomy changes

Systems need to be flexible enough to cope with changes. For example, the EIOPA taxonomy, the list of concepts supporting the XBRL reporting, has already been subject to frequent updating. EIOPA has, however, now published its preparatory taxonomy (version 1.5.2.c at the time of writing), and to help facilitate seamless integration with different XBRL solutions, EIOPA issues pre-packaged taxonomy versions as so-called Taxonomy Packages**, providing the correct entry points.

Nevertheless, taxonomy amendments are likely to continue once the taxonomies are in full use, adding to the challenges faced by report preparers, and testing the flexibility of their report production software.

** Note that the Taxonomy Packages may be found on the EIOPA website. CoreFiling also offer a handy taxonomy package repository from where the Solvency II taxonomy packages can easily be downloaded.

Conforming to mandatory business rules

Once the reporting templates are completed they can be uploaded via the regulatory portal, together with an accompanying coversheet identifying what has, or has not, been reported. Note, however, that these two elements will form part of a single XBRL document.

However, to be accepted by the regulator, not only are report submissions expected to conform to the XBRL 2.1 specification, but also to be valid against the many additional business rules imposed by the regulator, and which are also likely to be subject to change over time.

Creating a suitable workflow and product infrastructure that offers enough flexibility to cope with changes, yet handles the XBRL conversion without undue disruption, is a vital element of the preparatory process.

As we have discussed during this series of posts, knowing what to report, how and when to submit disclosures are challenges for Solvency II filers. In our final post we’ll look into a topic that may at first glance be overlooked: changes to the underlying taxonomy and specified business rules. We’ll discuss the impact on systems and data, and provide some further insight into how CoreFiling can help you meet the challenges and smooth the way towards successful XBRL reporting.