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EIOPA launched its consultation on the measures that national regulators would be expected to implement in 2014 in preparation for Solvency II. The proposed guidelines are aimed at supporting national regulators and insurers in their preparation for Solvency II and include measures relating to systems of governance, forward-looking assessment of an insurer's own risks, and the submission of information to national regulators. National regulators will be expected to adopt the guidelines in 2014 or explain why they have not done so.
Consultants say the proposed measures on reporting would place a heavy burden on insurers. The guidelines require insurers to provide quantitative and qualitative information on a quarterly and annual basis, with the first annual report expected in the second quarter of 2015.
Janine Hawes, insurance director at KPMG in London, says the level of reporting required by the guidelines is more extensive than many had expected and will include a significant proportion of the quantitative reporting templates (QRT) that will apply once Solvency II comes into force.
Paul Clarke, London-based global insurance regulatory leader at PwC, comments: "Aspects of the quarterly reporting could be a challenge for some, however given the need for this type of information by the European Central Bank, the inclusion within these guidelines was inevitable.
EIOPA chairman Gabriel Bernardino insists that the measures on information submission will prepare insurers for Solvency II. "We want to ensure that insurers are prepared in terms of their systems and processes and that good quality information is transmitted", he says.
Consultants say the guidelines would be beneficial by enabling insurers and regulators to gain some of the benefits of Solvency II sooner than the full implementation date, which is unlikely to occur before January 1, 2016. They will also help to bring consistency in the way supervisors act during the interim period.
Simon Sheaf, general insurance practice leader at Grant Thornton UK, says: "It will be helpful in providing fresh impetus to other insurers whose progress has slowed as they have become somewhat disillusioned by the various delays to the implementation date".
The early implementation of the Own Risk and Solvency Assessment (ORSA) principles would enhance the level of understanding that a company's senior management has of the business and the risks it faces", Sheaf adds. "If implemented well, [it] will become an invaluable management tool. Expecting companies to comply with the principles of ORSA sooner can only be a good thing."
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