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“[The survey] is about examining how well the companies are preparing – the preparedness of their board of directors and how they have allocated resources for the implementation of Solvency II”, says Bertil Sjöö, executive director of insurance and investment funds at the FI. The timetable for the work has yet to be finalised, but it is likely to begin in the third quarter. “Planning for this is going to start at the beginning of the autumn”, says Sjöö. “We had been talking about doing a pilot before the summer, but I am not sure we could manage that.”
The majority of large Swedish insurers are expected to be adequately prepared for the new Directive, which is due to come into effect on January 1, 2014. But questions remain over the readinesss of small and medium-sized insurers.
The regulator may provide additional support, particularly on the ORSA, for less well-prepared firms, adds Sjöö. “We could provide guidance on how to do the ORSA. This has been discussed within Sweden quite a lot”, he says. “A lot of companies want to have guidelines about the ORSA, for instance. If this becomes clear from the survey results then we have to do something for the industry.”
Other national regulators and insurance associations have been conducting their own tests to gauge insurers’ readiness for the Solvency II requirements. A questionnaire published by the French regulator, ACP, in June 2011 to measure the preparedness of insurers within the country found that three-quarters of companies were less than halfway towards completing their Solvency II compliance work. As a result, the ACP stepped up the pressure on French insurers with an active monitoring programme.
Dutch financial regulator, De Nederlandsche Bank (DNB), introduced a mandatory Solvency II test for all Dutch insurers in May this year. The test focused on Solvency II’s Pillar I quantitative requirements and associated reporting requirements under Pillar III.
Meanwhile, the German insurance industry trade body, the German Insurance Association (GDV), conducted a Solvency II quantitative impact study in April and May this year to test revised level 2 requirements for Solvency II based on insurers’ financial results as of December 21, 2011.
But few regulators or associations have yet shown interest in conducting more qualitative tests. The Association of British Insurers had expressed a desire to undertake such a study in November last year in response to concerns that previous qualititivate impact studies had been overshadowed by quantitative data studies. But the association has now decided not to undertake the study following feedback from members.
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