Governance
Solvency II: European adoption |
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| Governance | |
| Written by Phil Smart at KPMG | |
| Monday, 20 April 2009 | |
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Comment: The European Parliament is expected to soon adopt the revised Solvency II Framework Directive for the insurance industry. “We anticipate pervasive change to insurers’ governance and risk management systems and processes, as well as significantly onerous evidencing and monitoring requirements associated with internal model pre-approval process once the Directive becomes reality. The real challenge for the industry, however, will be in the practical implementation of the theory - making the whole thing work in practice will be very difficult for even the largest and best equipped insurers. “KPMG welcomes the clarity of approach to Solvency II provided by agreement on the Directive, although the absence of group support from the final proposals means that debate on the way in which group risk is monitored and managed will continue for some years to come. “The forthcoming votes in the European Parliament, followed by an ECOFIN vote in May, are not the end of the process though, as we will then see additional activity by CEIOPS and the Financial Services Authority as they consult on implementing the measures and rolling out the Directive in the UK. We believe, however, that this is absolutely the time for insurers to engage with the development of the Solvency II regime because those who treat Solvency II as more than just a ‘tick-box’ compliance exercise will see more benefits from the regime compared to those that do not.”
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