Reporting to the insurance regulator

Reporting to the insurance regulator

The Omnibus II Directive proposes changes to the 2009 Solvency II Framework Directive. It is still under discussion, requiring tripartite agreement by the European Commission, the European Parliament and the Council of the EU prior to full ratification.

The Solvency II pillars

EIOPA defines the Solvency II requirements under three pillars, as illustrated below.

Solvency II pillars

CoreFiling provide a comprehensive XBRL disclosure management platform that helps insurance companies to fulfil their obligations under Pillar III. However, the regulatory changes and compliance with the interim measures proposed by EIOPA will have resonance throughout the organisation. It’s not just an IT issue – it affects the insurance firm as a whole.

Remember that not only the regulator, but also investors, analysts and ratings agencies will ultimately have access to the information disclosed, so it is important that due care is taken to put in place effective internal processes to handle your disclosures correctly.

The Solvency II timetable

Stage reached Date
Omnibus II/Solvency II ratification Ongoing tripartite discussions
Guidelines approval November 2013
EIOPA taxonomy 4Q2013
First progress report submission 28th February 2015
First XBRL report submission 1st January 2016

NOTE: From 1st January 2014 National Competent Authorities (NCAs) have to start taking steps to put in place EIOPA guidelines and to send an annual progress report to EIOPA describing the provisions they are making, although Solvency II itself will not be mandatory until 1st January 2016.

Key issues:

Even though the European Parliament has not yet finally ratified the Omnibus II/Solvency II directive, it is expected that EIOPA will be in a position to start receiving reports as from 1st January 2014, and indeed some NCAs are expected to begin submitting XBRL documents before the 2016 compulsory date.

The introduction of the directive will have immediate impact on how insurance firms report to the supervisory authority. This will include a private annual report to supervisors, and a public solvency and financial condition report involving an increased level of disclosure. Firms will need to provide a core set of information on a quarterly and an annual basis, helping the regulator to maintain current information on the financial position of individual firms.

In summary:

  • Disclosures must include vastly increased amounts of capital, exposure and risk data
  • The frequency of reporting will increase to five times a year
  • There is only a short time to prepare the new reports
  • Reporting to EIOPA has to be in XBRL (eXtensible Business Reporting Language).

Whilst there are undoubted challenges in achieving full compliance, if done correctly the outcome could lead to greater competitive advantage through XBRL.

The CoreFiling XBRL solutions for Solvency II disclosures

Our XBRL disclosure management platform helps insurance companies to achieve their disclosure obligations under Pillar III of the Solvency II regulation. In particular, the reporting framework deals with the issues of data collection, XBRL production and validation, XBRL document review, plus packaging the XBRL document ready for submission. Demonstrations are available upon request.

Our Seahorse Excel to XBRL conversion product provides a simple, easy-to-use, SaaS-based solution to the problem of creating XBRL disclosures for Solvency II reporting. It also helps you deal with COREP and FINREP reports should these be required.