Solvency II contains three pillars of regulation to enhance customer protection, including qualitative requirements, quantitative requirements and disclosure requirements.
The first and third pillars oblige the insurance company to maintain transparent, monitored reporting on the utilization of equity capital. The second pillar requires the adoption of a sound internal governance system. The disclosure statement (third pillar) creates confidence on the part of the (life) insurance customer that available assets are being managed carefully and without undue risk.
The Solvency II guidelines require the meticulous logging and categorization of equity capital usage. The needed solvency capital requirement (SCR) varies according to the quality of the internally or externally sourced asset data and how reliable that data is understood to be (external rating, categorization, market prices etc.). Thus, the better an insurer is at maintaining a high data quality among assets, the better able that firm will be in managing its capital according to regulatory requirements.
To excel at the task of data management, the company needs a solid asset management tool with a proven integration of high quality market data and an efficient Solvency-II-capable reporting tool able to meet the strict regulatory demands being introduced.
- Extensive analysis of the existing market data and potential gaps
- Generation of approaches for compliance with reporting requirements
- Specification and analysis of regulatory requirements
- Implementation plan genesis
- Project management