Regulatory reporting, October 2014

Report
Solvency II regulatory reporting
bold)
Subtitle for event – (Arial 28pt)
Giles Fairhead
Head of Department, Retail Life
Date (Arial 16pt)
Life Insurance Division
Agenda
1. Solvency II reporting and submissions timetable
2. The PRA’s expectations in the preparatory phase
3. The PRA’s data collection system, firm testing and on-boarding plan
4. Asset data reporting expectations
5. Current ‘hot topics’ from industry engagement
2
Reporting and disclosure is integral to Solvency II
Three-pillar approach
Pillar 1
Quantitative
requirements
• Own Funds (including
balance sheet)
• Minimum capital
requirement (MCR)
• Solvency Capital
Requirement (SCR)
Pillar 2
Qualitative
requirements and
supervisory review
• Governance, risk
management and
required functions
2
• Own Pillar
risk and
solvency assessment
Pillar 3
Reporting, disclosure
and market discipline
• Supervisory Process
• Disclosure
• Transparency
• Support of risk-based
Pillar 3
supervision through
market mechanisms
• Market-consistent
valuation of balance
sheet
• Risk Based
requirements
• Business governance
• Risk-based
supervision
• Disclosure
• Transparent markets
3
The Solvency II reporting requirements include
qualitative and quantitative reports
•
•
The Solvency II regime will place new reporting requirements on firms
covering both quantitative and qualitative aspects
The Solvency and Financial Condition Report (SFCR) and the Report to
Supervisors (RSR) contain both qualitative and quantitative reports
Quantitative reporting templates
Sections
covered
•
•
•
•
•
•
•
•
•
Balance Sheet
Premium claims and expenses
Own funds
Variation analysis
SCR and MCR
Assets
Technical provisions
Reinsurance
Group reporting
Narrative reports
•
•
•
•
•
Business and performance
System of governance
Risk profile
Valuation for solvency purposes
Capital management
4
Pillar 3 will require firms and groups to make certain
reports and templates publically available
•
•
•
The Pillar 3 reporting requirements under Solvency II focus on two main reports, the Solvency
and Financial Condition Report (SFCR) and the Regular Supervision Report (RSR)
A limited number of quantitative templates and qualitative data are required to be made
publically available in the SFCR
All quantitative templates and a detailed set of qualitative data is required to be reported
privately to the regulator in the RSR
Audience
Public
Private
Narrative
Reports
Type
Qualitative
Qualitative
Frequency
Annual
• Annual summary
• In full every 3 years
Quantitative
Reporting
Templates
Type
Quantitative
Quantitative
Frequency
Annual
Annual & Quarterly
National
Specific
Templates
Frequency
N/A
Annually
Major developments affecting
relevance of SFCR will require
an updated SFCR
PRA ad-hoc reporting will
continue
Other
5
Solvency II reporting policy timetable
2014
2016
1 January 2016
SII Implementation
31 March 2015
SII Transposition
SII Directive
Guidelines
2015
Jun – Sep 2014
Guidelines 1 Public
Consultation
February 2015
Guidelines 1 Publication
July 2015
Guidelines 2 Publication
Dec 2014 – Mar 2015
Guidelines 2 Public Consultation
Implementing
Technical
Standards
Taxonomy
October 2014
ITS 1 Publication
Dec 2014 –Mar 2015
ITS 2 Public Consultation
July 2014
Final taxonomy for preparatory phase
December 2014
Draft SII taxonomy
June 2015
ITS 2 Publication
July 2015
Final SII taxonomy
April 2015
Candidate Final SII taxonomy
6
The PRA is seeking industry feedback on a range of
topics
The PRA will continue to publish
consultation papers on Solvency II to
gain industry feedback. Supervisory
statements will be published ahead of
transposition at 31 March 2015
•
•
•
The PRA proposed 11 NST templates
issued as part of CP16/14.
Remaining NST templates are expected
to be issued for consultation before the
end of the year.
The PRA expects to issue further
information, as required, on materiality
levels, exemptions and the application of
proportionality later this year or early
2015.
Number
Template Name
NS.01
With-profits value of bonus
NS.02
With-profits assets and liabilities
NS.03
Pools
NS.04
Assessable mutuals
NS.05
Revenue account (Life)
NS.06
Business model analysis (Life)
NS.07
Business model analysis (Non-Life)
NS.08
Business model analysis – financial
guarantee insurers
NS.09
Best-estimate assumptions for life
insurance risks
NS.10
Projection of future cash flows (bestestimate – non-life: sub-classes)
NS.11
Non-life insurance claims information
(general liability sub-classes)
7
Current timetable for submission of returns for firms and
groups with 31 December year end
Firms with non-December year end should speak to supervisors for their submission timetable
2015
2016
March 2016
Last Solvency I submission
Solvency I
Submissions
Solvency II
Submissions
Solos
Groups
2017
Preparatory phase
returns
Day 1
returns
Cat 1-3 firms only
All directive firms and groups
SII returns
1 Jul
25 Nov
20 May
26 May
25 Aug
25 Nov
25 Feb
19 May
Annual
Qrtly
One off
Q1
Q2
Q3
Q4
Annual
+ NST
15 Jul
6 Jan
2016
20 May
7 Jul
6 Oct
6 Jan
7 Apr
30 Jun
Annual
Qrtly
One off
Q1
Q2
Q3
Q4
Annual
NB: Details dependent on final text.
NB: Please be aware that the date of Day 1 returns was changed to 20 May
2016 for both solos and groups in the Delegated Act. This change was made
on the table above after the PRA Solvency II Conference on 17 October 2014 .
8
The PRA’s expectations of firms participating in the
preparatory phase
Expectations of firms were set in December 2013 when the PRA published
Supervisory Statement 4/13 on applying EIOPA’s preparatory guidelines
Category 1-3 firms and groups required to report. All firms and groups in
scope of preparatory reporting should have been notified in January 2014
A significant
increase in the
extent and depth
of insurance data
shared between
firms and the PRA
The preparatory phase should be used by firms to prepare for Solvency II
implementation and returns should be of a high standard and quality
Firms and groups will need to be on-boarded onto the BoE PRA Data
Collection system in Q1/2 2015. Training will also be made available
All quantitative firm returns are expected to be in XBRL format with
qualitative returns in PDF
NSTs not expected for interim reporting
9
Firms will submit returns via a new reporting system
• The PRA will use a new system to support data collection and XBRL
processing, which firms will be able to access via a web portal
• All returns must be provided in the following formats:
•
•
•
QRTs – in XBRL
Qualitative returns – in PDF
NSTs – in Excel (initially, may move to XBRL in the future)
Firm submits
QRTs
NSTs
Qualitative
returns
• Feedback provided to firms on validation and
plausibility
• Re-submissions may be required or further
explanation requested
Collections system
Secure
Web Portal
XBRL
processor
Validation
Plausibility
EIOPA
PRA
Supervision
10
The PRA will be conducting industry testing and onboarding firms throughout 2015
2014
2016
2015
Q4
Q1
PRA XBRL
testing
Q2
Q3
Q4
Industry testing (Cat 1-3)
Industry testing (all other firms)
On-boarding (Cat 1-3)
On-boarding (all other firms)
Q1
• The PRA intends to implement and start testing the data collection system and the XBRL processor
in Q4 2014
• Data collection system testing with firms is planned in two stages;
1.
Industry testing for Cat 1-3 firms – Cat 1-3 firms will be expected to test the PRA
external web portal prior to June 2015 including logging in, setting up their return and
submitting test data
2.
Industry testing for non Cat 1-3 firms – from Q3 2015 all other firms will be provided the
opportunity to also test the Portal, to trial logging in, setting up returns and uploading files
• Firms will be expected to on-board, with those participating in the preparatory phase prioritised
11
Solvency II reporting increases the amount of detailed
information reported
Solvency II returns will require the submission of detailed asset data for the first
time. As a result, the volume of data submitted is expected to significantly
increase.
This will include line by line asset data which must include a range of detailed
information about the asset including items such as NACE codes and
geography.
Given this increase in granularity the PRA expects firms to need to have:
•
•
Early engagement with the organisations who manage their assets to
prepare for the requirements that will be placed upon them as a result of the
asset data submissions
Early engagement with other stakeholders (e.g. IT providers, information
providers)
The PRA would expect cat 1-3 firms to be well advanced in this regard as some
of this granular information will be required in the preparatory reporting.
12
Current ‘hot topics’ from the industry engagement
•
The PRA Solvency II regulatory reporting industry working group acts as a forum for
the PRA and industry representatives to discuss technical and practical
implementation challenges.
•
Three key areas where firms are seeking further clarity have been highlighted.
Asset Look through
Audit and assurance of
regulatory returns
Materiality
threshold
13
Addressing firm questions
If firms have questions regarding Solvency II regulatory reporting
requirements and interpretation, they should :
1. Check the published PRA Q&As on the BoE PRA website
http://www.bankofengland.co.uk/pra/Pages/solvency2/preparing.aspx
2. Submit questions to EIOPA’s question and answer process if the
questions have not already been answered
https://eiopa.europa.eu/publications/eiopa-guidelines/qa-onguidelines/index.html
3. Help the PRA track questions submitted to EIOPA by notifying
[email protected]
The PRA will continue to publish answers to questions received from firms in
the run up to implementation
14
Key messages – regulatory reporting
•
The PRA is building a new data collection system and will be ready to receive the
submission of information in the preparatory phase from June 2015
•
The PRA is consulting on NSTs in CP16/14, final templates will be published in a
policy statement ahead of transposition. Further consultation papers will be
published on reporting including Lloyd’s NST and firm exemptions from Solvency
II reporting
•
Reporting policy is increasingly stable, there are some outstanding issues that the
PRA is aware of through its work with the regulatory reporting industry working
group
•
Testing of the new system is expected to start in Q1 2015 and will be phased in
the run up to implementation. Firms will be expected to on-board to the system
from Q2 2015. Cat 1-3 firms participating in the preparatory phase will be
prioritised for both testing and on-boarding
Next steps for firms
Firms with a 31 December year end should be aware of when they will be involved in
PRA testing, on-boarding and when they need to submit their first returns
Cat 1-3 firms
All other firms
•
•
Starting Q3 2015
•
February 2015 for selected subset
of firms. (participating firms have
already been notified)
Q2 2015 for all other Cat 1-3 firms
On-boarding
•
Starting Q1 2015
•
Starting Q4 2015
First
preparatory
phase
returns
•
Solos - 1 July 2015 , Annual
submission
Groups - 15 July 2015, Annual
submission
•
No reports due during
preparatory phase
First
Solvency II
returns due
•
Solos – 20 May 2016, Day 1
submission
Groups – 20 May 2016, Day 1
submission
•
Solos – 20 May 2016 , Day 1
submission
Groups – 20 May 2016, Day 1
submission
Testing
•
•
•
NB: Please be aware that the date of Day 1 returns was changed to 20 May
2016 for both solos and groups in the Delegated Act. This change was made
16
on the table above after the PRA Solvency II Conference on 17 October 2014 .

similar documents