Post by account_disabled on Mar 5, 2024 7:03:59 GMT
Solvency II is a European Directive aimed at regulating insurance and reinsurance activities , homogenizing the European legislative landscape. In January 2016, the contents of this standard will become effective in each national legal system and all companies in this sector will be bound by its quantitative, qualitative and market discipline requirements. Today, when there is still more than a year left to finish preparing for the new reality in the insurance sector, companies in the industry are finishing finalizing the changes. A process that began several years ago but that has required all this time to ensure a good adaptation to the new requirements of Solvency II. Solvency II and risk management Guaranteeing effective risk management and gaining precision in this matter is one of the highlights of the Solvency II articles. To reach the level required by the Directive, the risk management that insurers and reinsurers carry out must cover the following areas: Insurance and reserves. Solvency II Photo credits: SolvencyIIWire Operational risk management. Investment evaluation. Asset and liability management Reinsurance and risk reduction techniques. Being able to use different risk management mechanisms for this purpose , among which the following stand out : Risk assessment , considering both current risks and those likely to arise in the future.
Recalibration of internal models. Self-assessment of solvency , based on the results obtained in the risk assessment . The governance system proposed by Solvency II Despite the challenge imposed by the new risk management proposed by Solvency II, it is not the most important challenge. To live up to the requirements of the Directive, companies in the sector will also have to carry out actions aimed at guaranteeing the adequacy of their governance system. Among the highlights are three: Internal audits : which will in no case be influenced by the management body, must be carried out according to a pre-established plan and will take a risk-based approach when deciding their priorities. The scope of internal audit policies is determined by articles 41 and 47 of Solvency II. Actuarial function: it is based on two principles, it must guarantee that the company has the capacity to face possible conflicts of interest that may arise; and must assess the consistency of the data, both internal and external, that have been used to calculate the technical provisions in relation to Chile Mobile Number List the data quality standards indicated in the Directive. Internal control: the importance of which must be confirmed and which must be applied throughout the group. For this purpose, the systems and mechanisms that are considered appropriate must be established, always complementing them with a notification system that provides relevant information for decision-making to the administrative, management and control bodies.
The main requirements of Solvency II for companies in the insurance sector New call to action The only way to respond to the requirements that support the three pillars on which the Directive is structured ( requirement of own resources, supervision and transparency and disclosure processes , also known as quantitative and qualitative requirements and market discipline) is to prepare to comply. new tasks regarding: Governance: implies establishing an effective system that makes it possible to carry out healthy management developed in an area of prudence. Risk management: global and in detail, which includes the present and extends into the future, which includes the company itself and its interdependencies, and which, based on periodic monitoring and monitoring, manages to provide the necessary information to measure and control risk. reality, taking corrective actions when the existence of deviations is notified. Obligation to report: from transparency and allowing the supervisory function that the Authorities will put into practice to evaluate the governance system and models adopted, their effectiveness and quality. The key to success comes from the text of the Directive itself, where a transversal reading suggests that the keys to success in the transition towards the new reality that comes from the Solvency II command.
Recalibration of internal models. Self-assessment of solvency , based on the results obtained in the risk assessment . The governance system proposed by Solvency II Despite the challenge imposed by the new risk management proposed by Solvency II, it is not the most important challenge. To live up to the requirements of the Directive, companies in the sector will also have to carry out actions aimed at guaranteeing the adequacy of their governance system. Among the highlights are three: Internal audits : which will in no case be influenced by the management body, must be carried out according to a pre-established plan and will take a risk-based approach when deciding their priorities. The scope of internal audit policies is determined by articles 41 and 47 of Solvency II. Actuarial function: it is based on two principles, it must guarantee that the company has the capacity to face possible conflicts of interest that may arise; and must assess the consistency of the data, both internal and external, that have been used to calculate the technical provisions in relation to Chile Mobile Number List the data quality standards indicated in the Directive. Internal control: the importance of which must be confirmed and which must be applied throughout the group. For this purpose, the systems and mechanisms that are considered appropriate must be established, always complementing them with a notification system that provides relevant information for decision-making to the administrative, management and control bodies.
The main requirements of Solvency II for companies in the insurance sector New call to action The only way to respond to the requirements that support the three pillars on which the Directive is structured ( requirement of own resources, supervision and transparency and disclosure processes , also known as quantitative and qualitative requirements and market discipline) is to prepare to comply. new tasks regarding: Governance: implies establishing an effective system that makes it possible to carry out healthy management developed in an area of prudence. Risk management: global and in detail, which includes the present and extends into the future, which includes the company itself and its interdependencies, and which, based on periodic monitoring and monitoring, manages to provide the necessary information to measure and control risk. reality, taking corrective actions when the existence of deviations is notified. Obligation to report: from transparency and allowing the supervisory function that the Authorities will put into practice to evaluate the governance system and models adopted, their effectiveness and quality. The key to success comes from the text of the Directive itself, where a transversal reading suggests that the keys to success in the transition towards the new reality that comes from the Solvency II command.
