Solvency II final agreement New role and tasks

“Solvency II - final agreement. New role and tasks for insurance supervisors” Monday 29 June 2009 PAUL WINDELS Financial Analyst CBFA Assistant to Michel Flamée 1

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Table of contents 1. Introduction - CEIOPS stocktaking 2. The Supervisory Review Process (SRP) 3. Information Analysis in view of the SRP • 3. 1 Business and external environment • 3. 2 Quantitative requirements • 3. 3 Risk management system 4. Conclusion 3

1. Introduction Stocktaking on differences in supervisory powers and objectives taking-up of business and licensing ongoing activity and compliance crisis management and insolvency proceedings rule making administrative measures and sanctioning powers considerable differences between supervisors need for common minimum requirements 4

2. The Supervisory Review Process (SRP) Why What How • Framework Directive - Pillar 2 • Convergence of supervisory objectives • The overall process conducted by a supervisor in reviewing (re)insurance companies on an individual basis • The SRP should be adapted to the nature, scale and complexity of risks of each company → appropriate judgment 5

2. The Supervisory Review Process (SRP) 6

2. The Supervisory Review Process (SRP). 7

3. Information Analysis (SRP) 1. Business and external environment - trends on main business lines - profit areas and potential risks - external developments - financial performance - underwriting performance 8

3. Information Analysis (SRP) 2. Quantitative requirements - investment analysis - ALM analysis - adequacy of technical provisions - calculation of MCR and SCR - analysis of own funds 9

3. Information Analysis (SRP) 3. Risk management system - organisational structure and process - stress testing and scenario analyses - review of ORSA - evolving solvency needs - use of internal model 10

4. Conclusion Focus of Solvency II: - risk based supervision - forward-looking approach - tailored requirements And: - group supervision - dialogue and cooperation 11

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