On 9 December, the Central Bank sent a "Dear CEO" letter following their recent review of the solvency capital requirement calculations for a number of life insurance companies. The aim of the letter is to alert firms to the key control issues relating to the calculations which came out of the review.
The key issues highlighted by the review were inadequate controls, not meeting Solvency II regulations, management actions not being approved and the employee defined benefit scheme not being treated as a ring-fenced fund.
While these issues were discovered when reviewing the SCR calculation they are linked to trends the Central Bank indicates it has noticed in Solvency II reporting generally. The Central Bank warns that annual reporting under Solvency II requires a step up in terms of complexity and breadth of reporting compared to the quarterly reporting templates. The Central Bank advises firms to make sure that the returns clearly represent their business as a whole. To guarantee this firms should ensure their own governance frameworks have the capability and capacity to review, challenge and correct inaccuracies relating to wider data reporting standards.
A link to the letter is here.