In September 2008, the FSA published Discussion Paper 08/4: Insurance Risk Management: The Path to Solvency II (DP08/4). The purpose of DP08/4 was to highlight and explain the key elements of the Solvency II regime, with the aim of stimulating and helping UK insurers’ preparations. DP08/4 also included a section on key messages for UK firms and each chapter highlighted the functions within firms that will need to be involved in implementing particular requirements.
Since the publication of DP08/4, the Solvency II Directive has been officially adopted. Although there have been some changes to the Directive through the co-decision process between the European Parliament and the Council, the key point to note is that the implementation date for Solvency II will remain as 31 October 2012.
The FSA has now published Feedback Statement 09/1: Insurance Risk Management: The Path to Solvency II - Feedback on DP08/4 (FS09/1). In FS09/1, the FSA summarises the comments received to the questions posed in DP08/4 and the responses to them.
In FS09/1, the FSA stresses that the risks for a firm not developing detailed plans for Solvency II implementation are great. Firms should have completed or be in the process of completing a detailed gap analysis to identify any shortfalls in expected compliance with the Solvency II requirements, as they bear on their operations.