On 8 November 2011, the European Insurance and Occupational Pensions Authority (“EIOPA”) published two consultation papers in relation to reporting and public disclosure under Solvency II. The FSA has published guides to the consultation papers as well as, on 30 November 2011, publishing questions and answers (“Q&A”) on issues relating to reporting and disclosure under Solvency II.
The first EIOPA consultation paper focuses on a draft proposal on quantitative reporting templates. Alongside this paper, EIOPA has published solo reporting templates, group specific reporting templates and summary documents.
The second EIOPA consultation paper concerns own risk and solvency assessment (“ORSA”) and includes proposed guidelines on:
- the content of the narrative Solvency and Financial Condition Report (“SFCR”);
- the content of the narrative Regular Supervisory Report (“RSR”);
- reporting where pre-defined events have occurred; and
- processes for public disclosure and supervisory reporting.
The paper contains 27 guidelines on the content of the SFCR (which Solvency II requires firms to publish and provide to the FSA on an annual basis) and two additional guidelines on group SFCRs. There are also five guidelines on the process for reporting, two guidelines in relation to identifying pre-defined events and 16 guidelines on the content of the RSR.
The guidelines for both the SFCR and the RSR cover five broad topics: business and performance, system of governance, risk profile, valuation for solvency purposes and capital management.
The consultation papers are both open for feedback until 20 January 2012.
In response to these consultation papers, the FSA published guides summarising the content of the papers and setting out what firms should do next, as well as a set of Q&A on reporting and disclosure.
The FSA emphasised that firms should read the consultation papers in detail and respond to them via the EIOPA website, explaining which parts they like (with reasons) as well as commenting on elements that need improvement, and proposing alternatives.
It also encouraged senior management to take steps to understand the information required, to ensure they can provide the data required to complete the returns and to keep track of changes to their regulatory returns software.
In addition, it reminded firms that they can register with the EIOPA website for updates about consultations and other developments.