CBI publishes it's feedback statement on CP92 Consultation paper
"Domestic Actuarial Regime and Related Governance Requirements under Solvency II"
The requirements will apply from 1 January 2016. A link to the response can be found here. We recommend reading the document in its entirety but some highlights are as follows:
- The CBI will establish a new PCF role of “Head of the Actuarial Function” (HoAF). This individual is expected to be a member of a recognised actuarial association with an appropriate level of experience. The Central Bank will issue guidance regarding F&P changes under Solvency II. The CBI has confirmed that the HoAF may be outsourced, except for firms with a “High” PRISM rating.
- The CBI has clarified that the actuarial function is not precluded from calculating Technical Provisions but firms must ensure appropriate independence when the actuarial function both calculates and validates Technical Provisions. The HoAF is required to produce an Actuarial Opinion on Technical Provisions which should be on a Solvency II line of business level. and The CBI will issue the form of the AOTP
- The HoAF must provide an opinion on the ORSA to the board which addresses at least the following:
The range of risks and the adequacy of stress scenarios considered as part of the ORSA process;
The appropriateness of the financial projections included within the ORSA process;
Whether the undertaking is continuously complying with the requirements regarding the calculation of TPs and potential risks arising from the uncertainties connected to this calculation.
The current peer review cycle will not recommence on implementation of these requirements. An independent recalculation of Technical Provisions is not necessary, except for material non-life business lines, but a justification should be provided if a recalculation is not performed.
- The CBI has clarified that the reserving committee requirement only applies to non-life entities with a “High” PRISM rating.
How can we help
To the extent you have any questions in relation to CP92 above or you would like to discuss how we could potentially help you close any gaps arising as a consequence of the proposed requirements above, please feel free to give us a call or arrange a face to face meeting with us.
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