Advanced Solvency II Workshop

Duration:
2 days
Location:
Prague, NH Hotel Prague
  • Concepts, Regulations and Overview
  • Solvency II Project: Three Pillar Approach
  • Capital Requirements: SCR and MCR
  • Risk Management and Role of the Compliance
  • Disclosure, Reporting and Supervision Implications
  • Wider Industry Considerations
This 2-day course will describe the Solvency II Directive as it applies to EU countries. The course will not only set out the contents of Solvency II but will provide guidance as to what insurance firms should be doing now to prepare themselves for this important change in financial regulation.

Learning Objectives

After attending this course a course attendee will be able to:
  • Describe the main provisions of the existing EU regulations governing solvency margins for insurance firms
  • Explain the changing business, economic and policy context that is driving the regulations
  • Discuss objectively the current proposals for Solvency II and their effect on his or her own firm
  • Apply the knowledge gained through the course to help develop plans for the integration of the new regulations into his or her firm's compliance strategy
  • Analyse the potential impacts on his or her firm of becoming compliant with the emerging regulations of Solvency II
  • Synthesise alternative compliance strategies that could be appropriate as a response to the new regulations arising from Solvency II
  • Evaluate the alternative Compliance strategies to recommend those most suited to the needs of the firm

Session 1: Solvency: Concepts and Regulations

  • Concept of solvency
  • Solvency I/ICAS
  • Solvency II
  • 3-Pillar architecture
  • Consolidation of existing regulations
  • New additions and the Lamfalussy Model
  • CEIOPS and EIOPA

Case Study: Gap Analysis

Session 2: Solvency II Overview

  • Economic context and trends
  • Goals and objectives
  • Scope
  • Economic capital
  • Stronger risk management
  • Economic benefits
  • Policy context in the EU
  • Relationship with international accounting standards

Session 3: The Solvency II Project

  • Capital adequacy
  • Risk types
  • Traditional project disciplines
  • Involving the key players
  • Main project phases

Case Study: Selected Project

Session 4: Pillar 1 Quantitative

  • Economic capital
  • Capital Tiers 1- 3
  • Assets
  • Own funds
  • IBNR, etc
  • Covariance matrix methodology
  • Solvency capital requirement (SCR)
  • Minimum capital requirement (MCR)
  • Data management
  • Calculating the SCR
    • Standardised approach
    • Internal models
    • Partial Internal models
  • Simplifications
  • Quantitative Impact Studies
  • QIS5
  • Supervisory intervention

Day Two

Session 5: Pillar 2 Qualitative

  • Enterprise risk management
  • Gap Analysis
  • Own Risk and Solvency Assessment (ORSA)
  • Use Test
  • P & L Attribution
  • Validation
  • Model Governance
  • Documentation.
  • Capital Add-On
  • Fit and Proper
  • Actuarial duties as part of governance

Case Study: ORSA

Session 6: Risk Management

  • Risk modelling
    • Assets, threats, impacts and vulnerabilities
    • Severity and frequency of events
    • Stochastic risk modelling techniques
    • Risk mitigation and control
  • Risk appetite and key risk indicators
  • Risk registers
  • Outsourcing
  • End User Computing and spreadsheets
  • Supervisory review process
  • Internal Model Approval Process (IMAP)
  • Role of the Compliance Department and compliance monitoring approaches
  • Internal Audit

Case Study: Risk Management

Session 7: Pillar 3 Reporting

  • Disclosure requirements
  • Report to Supervisors (RTS)
  • Public disclosure Solvency and Financial Condition Report (SFCR)
  • Supervision implications for insurance firms

Case Study: Financial Reporting Workshop

Session 8: Wider Industry Considerations

  • Relationship to banking regulation
  • Lessons from the Credit Crisis
  • The European Insurance Market
  • Solvency II Winners and Losers
  • Anticipated changes in the insurance sector, post Solvency II implementation
  • Product line implications, post Solvency II implementation
  • Group regulation
  • Supervisory co-operation

Evaluation and Termination of the Workshop

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