Although the pre-application process is voluntary, CEIOPS believes it is beneficial for undertakings and supervisors to have a consistent internal process to facilitate the introduction of a balanced internal models approval process.
CEIOPS has published its First Level 3 Guidance for Solvency II and initiated a new stage in its work towards ensuring a fully functional regulatory architecture in advance of the Solvency II implementation deadline.
CEIOPS’ guidance on the pre-application process for internal models builds on the Final Level 2 Advice on the internal models approval process submitted to the EC in November 2009. It benefits from a 10-week consultation process in which stakeholders provided CEIOPS with positive feedback.
Although the pre-application process is voluntary, it is beneficial both for undertakings and supervisors to have a consistent internal models pre-application process to facilitate the introduction of a balanced internal models approval process. In particular, the pre-application stage to the approval process will assist undertakings by giving them the opportunity to liaise with their supervisory authorities as they develop their internal models and allow them to obtain an early indication on their preparedness to apply for approval.
The information reviewed will enable supervisory authorities to form a view on how prepared the undertaking is to submit an application, being able to see internal models at a relatively early stage of development, enabling assessment during the application stage to be carried out from a position of knowledge.
The guidance also assists in increasing convergence in supervisory processes across the EEA, which is the main goal of CEIOPS’ Level 3 measures. It provides for an appropriate course of supervisory action as to the operation of the College of Supervisors in the pre-application process and therefore helps to promote supervisory cooperation and harmonisation.
Following delivery of its final advice on the Level 2 Implementing measures, CEIOPS will now focus on developing Level 3 Guidance for all areas of Solvency II.
© CEIOPS
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