HPBS Ltd                              

 

Chartered Accountants  

 

 

 

                                                                     A member of the Practice Assurance Scheme

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Solvency II requirements

The Solvency II regime extends the existing regulations and utilises the risk of asset holdings and business profile to determine the appropriate level of capital for a company to hold. The importance of Risk Management systems and clear, documented, well designed and operationally effective internal controls around the company cannot be under estimated.

Insurance companies are invited to choose between the "Standard model", prescribed by the FSA or the company can use their own "Internal model" in assessing the basis of their capital requirements, specific to their business.

A "three pillar structure"  (building alongside the previous "two pillar approach")  to underpin the rationale for the capital holdings has been adopted. These can be summarised as follows:

  • Quantitative Requirements
  • Supervisor Review
  • Market Discipline

The pillars

Quantitative                       Supervisor review          Market Discipline

                                           

"The Doing"                                             "The Review and Control"                 "The Disclosure"

Across each of these pillars lay the RISKS - These are

  • Market
  • Credit
  • Insurance
  • Liquidity
  • Operational

The effect on the business of Solvency II

Risk Management, Capital adequacy are obvious areas of impact on the business. However other aspects such as re-insurance arrangements, underwriting, investment and hedging strategy may need review and re-assessment.

 The act takes effect from 2012.

HPBS Ltd has a skilled pool of resource in addressing the risk and internal controls to support the quality of data, the calculation kernel. We specialize in documenting and identifying data flows, risk and controls and identifying and managing action toward achieving compliance.

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Disclaimer: We believe the information throughout this web site to be correct at the time of publication , but cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein.

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