New regulations and stricter compliance requirements for Insurance Companies
The recent trend towards more objective and transparent published metrics of financial performance and risk has resulted, in Insurance, in the emergence of a new standard for statutory risk capital requirements (Solvency II) as well as new standards for disclosing Embedded Value (European and Market Consistent EV) and accounts (IFRS4).
Avoiding excessive capital penalisation through compliance of these standards can require radical re-engineering of data and data processing systems from which the required numbers are derived. In many cases this investment is amply recouped when external reporting requirements are integrated into a wider internal risk/return framework that management can use to make sure that the risk of any undertaking is built in to business processes from inception.
Regulatory compliance should always be seen as part of a broader risk infra-structure that should be designed with the global trend towards an Economic or Fair Value view of a bank’s exposures.
Finalyse can help Insurance Companies comply with the Regulations they are concerned with.
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Similarly to credit institutions under the CRD IV norms, Insurance companies have been subjected to new regulatory reforms such as the Solvency II directive. Through enhanced capital requirement rules and risk management practices, Insurance companies need to abide by requirements which, if left unfulfilled, may result in administrative sanctions such as fines and even license removal.
The current regime of Solvency is composed by numerous directives applicable until Solvency II’s entry into force in January 2016. From then on, demonstrating transparency and auditability of systems used and their effective integration into the decision making process will be of crucial necessity for Insurance companies.
Finalyse can help by bringing its numerous years of experience of designing and implementing frameworks satisfying regulatory reporting and risk management requirements in the Insurance sector.