Do I need to report and when?
In the second of our blog series, we examine which insurance undertakings will have to begin reporting under the preparatory phase that EIOPA has introduced as a precursor to full Solvency II reporting which finally takes effect in January 2016.
While all insurers are expected at least to start preparing for the full implementation of the Solvency II regime, only certain organisations meeting prescribed thresholds will need to report to their NCA during the preparatory phase, but this is due to begin in June 2015, so time is very short.
Interpretation of the EIOPA thresholds
The thresholds specified by EIOPA are:
- Individual annual reporting for firms representing at least 80% of the national market share
- Individual quarterly reporting for firms representing at least 50% of the national market share
- Group quarterly or annual reporting for firms with more than EUR 12 billion (period ending during 2012)
However, each NCA is left to interpret these thresholds as it sees fit. For example, in the UK the Bank of England/PRA stipulates that reporting applies to firms in categories 1-3*, on both an individual and group basis, and such firms should already have been informed by the PRA of the impending reporting requirement, which applies from June 2015 to solo organisations and from July 2015 to groups. These thresholds will disappear with the arrival of full scope reporting in January 2016.
* The Bank of England/Prudential Reporting Authority recognises five different categories for the classification of deposit-takers, investment firms and insurers that it supervises; the five categories are determined by the disruption these firms might inflict on the UK financial system if they should fail or be found to conduct their business in an unsafe manner. Only category 4 and 5 firms are likely to have little impact. [source: http://www.bankofengland.co.uk/pra/Pages/supervision/default.aspx]
The full scope Solvency II reporting regime starts 1st Jan 2016, but from the beginning of June 2015 reporting under the preparatory phase is due to begin according to the EIOPA timetable. During this first phase annual information is submitted once and quarterly information must be submitted for quarter 3.
The Solvency II Preparatory Schedule is as follows, though dates may be subject to change:
|Frequency||Application date||Reference date||Deadline|
Application Date is when the reporting period starts.
Reference Date is the reporting period.
‘Preparatory scope’ taxonomy
It is worth noting that insurance companies subject to reporting during this first phase must report against the ‘preparatory scope’ taxonomy (version 1.5.2.c), but when the ‘full scope’ taxonomy (currently version 1.6) comes into force on 1st January 2016, the reporting burden will increase substantially. Full scope reporting includes many more reporting templates, so even insurers that report during the preparatory phase will need to gather and submit much more data to comply with the full scope reporting mandate.
In the next article we’ll take a look at the nature of the reports to be submitted.