Solvency II Reporting Services for Investment Funds
Deloitte’s integrated solution servicing world-class asset managers
Solvency II (Directive 2009/138/EC) is a European reform applicable to insurance and reinsurance undertakings which came into effect on 1 January 2016.
What is Solvency II?
Consistent with other financial services legislation such as the Basel III framework for banking supervision, Solvency II is a regulatory framework applying to European insurance and reinsurance undertakings. The regulation intends to offer these undertakings incentives to better measure and manage their risk situation - i.e. lower Solvency Capital Requirements (“SCR”), lower pricing - and to implement appropriate risk management systems and sound internal controls. This framework is organised in 3 pillars: Pillar I focuses on SCR, Pillar II focuses on governance and supervision, while Pillar III focuses on disclosures and supervisory reporting.
SOLVENCY II FRAMEWORK
Assets & liabilities valuation
Solvency capital requirements
Minimum capital requirements
Governance & supervision
Impact for Asset Managers & Asset Servicers
Impact only for Insurance Undertakings
- Asset Managers must be able to provide insurance undertakings with accurate information to permit calculation of the various SCRs
- Asset Managers should define clear investment policies including sought hedging techniques
- Data governance should be defined to ensure the quality of the sourcing
- All processes should be documented and readily available in case the regulator requests an on-site inspection
- Own Risk and Solvency Assessment (ORSA)
- Asset Managers should provide insurance undertakings with relevant information required for the Quantitative Reporting Templates (QRT & annual disclosure)
- All reports are submitted to the regulator by the insurance undertaking
- The final reports might be audited
Solvency II for Asset Managers: Key challenges
Insurance companies delegate a large part of their asset management and therefore rely on the asset management industry to provide them with the input data necessary to fulfil their regulatory obligations. In order to support insurance companies in their SCR Market calculation and QRT delivery, various industry associations across different member states agreed on a Standardized EU template, the Tripartite template (“TPT”). The TPT supports investment management companies by providing a standardized way to exchange data between them and insurers. The investment fund industry is facing four main challenges in meeting the Solvency II reporting requirements: Flexibility and timing, regulatory, data management and processing.
Solvency II Challenges
Deloitte Solvency II Reporting services for Investment Funds: Our offer
Deloitte has developed a one-stop-shop solution to assist asset managers with their Solvency II reporting:
- To help asset managers leveraging on their data to meet their investors’ requests,
- To produce analytics reporting to their insurance clients, and,
- To provide advisory services in the structuring of their investment products.
Deloitte "One Stop Shop" solution servicing world class asset managers
Basel III, CRR, Solva, VAG, GroMiKV, Solvency II, SCR
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