Solvency II Update - January 2012

Author:Matheson Ormsby Prentice's Insurance Practice Group, Sharon Daly, Helen Noble and Darren Maher
Profession:Matheson Ormsby Prentice
 
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Solvency II Industry Readiness Survey

The second Solvency II Industry Readiness Survey was issued by the Central Bank of Ireland's (the "Central Bank") dedicated Solvency II team on 1 September 2011. Consisting of over 70 questions, the survey addresses areas such as implementation, planning, training and communications, internal models, ORSA, QIS5 and reporting and disclosure, amongst others. According to the European Insurance and Occupational Pensions Authority ("EIOPA"), the aim of the survey is to highlight areas requiring attention from both firms and supervisors in preparing for the implementation of Solvency II. The survey was sent to persons identified as the Solvency II responsible person in over 280 insurance and reinsurance undertakings in Ireland. Completed responses were submitted by 216 firms and 29 firms indicated that they would not be submitting a response on the basis that they were not actively preparing for Solvency II. The Central Bank has noted that approximately 40 undertakings failed to respond to the survey and that such undertakings will be pursued by the Insurance Supervision Team in order to obtain an updated picture of their Solvency II preparations. The results of the survey have been summarised to determine overall industry readiness for Solvency II and also to assess firms' readiness at an individual level. The following are a sample of some of the key findings and themes of the survey as presented by the Central Bank at the Solvency II Industry Forum on 29 November 2011:

73% of undertakings surveyed stated that they are 'quite confident' that they will be sufficiently prepared to meet the Solvency II requirements by 31 December 2012; 65% of undertakings surveyed stated that they were 'quite confident' that the existing governance structures within their organisation comply with the Solvency II requirements; When asked about the approach undertakings would take to build new systems required for IT and disclosure in order to meet new reporting requirements, 82% stated that they would use current reporting systems and make necessary updates and changes to factor in the revised Solvency II requirements, compared to 18% of undertakings who stated that they would develop a new system based on Solvency II reporting and disclosure requirements; 83% of undertakings surveyed stated that they were 'quite confident' that the Central Bank will be sufficiently prepared to undertake the supervisory review under...

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