Solvency II Reporting Services for Investment Funds

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 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”) as provided by the FinDatEx. 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

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