Pensions Digest, Towers Watson's monthly publication brings together recent developments for pensions professionals.
In this Issue: EC Green paper; Stewardship Code; Irish Stock Exchange consultation; Voting recommendations; Need for clarity on annual incentive schemes;
Statistics contains the recent history of past statistics as well as the new monthly figures.
A comparative analysis of asbestos disclosures from annual reports on Form 10-K submitted by public corporations that are known to have been named in asbestos personal injury litigation
The Government has published a consultation paper on proposals to remove the requirement to purchase an annuity by age 75 and, in certain circumstances, to allow individuals to take more of their pension savings as a lump sum.
The Pensions Regulator issued for consultation new Guidance on transfer incentives . A joint statement from the regulator and the Financial Services Authority (FSA) has also been published.
The Global Alternatives Survey aims to track the movements of alternative assets managed on behalf of pension funds by the world’s largest alternative investment managers and to produce authoritative rankings.
A draft of a new pension bill that the Egyptian government submitted to Parliament on June 9, 2010 proposes a gradual increase in retirement age from 60 to 65, effective beginning in January 2012.
The Minister for Pensions has made a written statement on 8 July 2010 announcing that the measure for minimum increases to occupational pensions is to be switched to the Consumer Prices Index (CPI) from the Retail Prices Index (RPI). This follows the Chancellor of the Exchequer’s Budget announcement that public service pensions and State benefits would in future be increased this way
The European Commission today published a Green Paper, the aim of which is to consider how best to help Member States deliver adequate, sustainable and safe pensions. The Paper considers both State and private pensions (irrespective of whether or not funded) and their complicated interaction with demographic and economic change.
The Regulator launched a consultation on guidance, aimed primarily at trustees, on multi-employer schemes – particularly matters relating to employer debt.
In this issue: Emergency Budget; Stewardship Code; FSA letter; EC legislative proposals; Senior public sector pay; FTSE 100 trends for 2010; FTSE 100 voting advice and result patterns; Former employees and right to receive a bonus.
This edition of Pensions Digest brings together recent pension developments previously brought to you by Towers Perrin’s Monitor and Watson Wyatt’s Pensions News Filter.
Statistics contains the recent history of past statistics as well as the new monthly figures.
The Practitioner's Guide to Generalized Linear Models is written for the practicing actuary who would like to understand generalized linear models (GLMs) and use them to analyze insurance data. The guide is divided into three sections.
Earlier this year, the government published regulations intended to ease the financial burden under the existing requirements for a cash injection to an underfunded pension plan in the event of restructuring within a group of companies. However, there are strict and complex restrictions.
The Department for Work and Pensions (DWP) announced today (24 June 2010) how it will approach making changes to the current legislation in respect of how and when to increase the State Pensions Age (SPA) to 66. In addition, it set out the scope of a review on how to implement automatic enrolment effectively.
The Chancellor, George Osborne, presented his first Budget report on 22 June 2010. Recognising industry concerns, it contains a number of measures affecting pensions, the most important of which is a commitment to work with the pensions industry to find simpler ways of restricting tax relief for high earners than the high income excess relief charge.
The private equity industry has been under the spotlight over the past few years, not always for the right reasons. This publication seeks to review how recent developments will affect the private equity industry and to identify areas of possible opportunity for investors over the next couple of years.
The conditions between the early 2000s and the fourth quarter of 2007 provided private equity managers with substantial tailwinds.
Why invest in funds of funds?
The Pensions Regulator has issued a statement for trustees of defined benefit schemes setting out its expectations of trustees in relation to employer covenant issues and outlining plans for guidance on this subject and on transfer incentives that it will issue for consultation in the coming weeks.
Welcome to the 2010 edition of UK Long-term statistics, Towers Watson’s annual publication that presents historical data for key economic and investment indices.
Statistics contains the recent history of past statistics as well as the new monthly figures.
A recent survey conducted by Towers Watson indicates that the switch from defined benefit (DB) plans to defined contribution (DC) plans is continuing in the U.K. Most DB plans have already been closed to new members, but only some of those have also stopped the accrual of new benefits; the proportion of sponsors taking this second step is expected to grow.
Following the dislocation in financial markets in 2008, a wide range of approaches was used to set the allowance for risk within 2008 EEV and MCEV reporting.
Despite the economic downturn, the average maximum contribution that employers are making to defined contribution (DC) plans is increasing, which underscores the continued growth of DC arrangements in the UK. This is the key finding of the sixth Towers Watson survey of companies in the FTSE 100 index.
In this edition: Updated UK Corporate Governance Code; Increased tax burden; Senior public sector pay; Financial services pay.
This piece has been written by our Global Investment Committee and provides a summary of the main market price action, important macro developments and new policy responses as a result of the Euroland economic crisis.
This edition of Pensions Digest brings together recent pension developments previously brought to you by Towers Perrin’s Monitor and Watson Wyatt’s Pensions News Filter.
Towers Watson clarifies causes of recent failures of catastrophe bonds to protect investors and describes what can be done to restore market confidence and protect assets going forward.
In this edition, Gary Smith interviews Di Hassell-Mead where they discuss an exciting new approach to promoting member engagement.
This publication contains a series of articles which consider various aspects of DC investment design and execution; we look at what drives member behaviour, assess whether lifecyle strategies are meeting members’ needs throughout their journey to retirement and focus on how risk can be better managed in a DC environment, by looking at a number of innovations in this area. It is intended to act as a reference book for anyone involved in operating a DC pension plan – an essential guide to developing and maintaining a successful investment strategy.
This survey explored how companies are determining, managing, monitoring, funding and allocating capital in light of the popularity of economic capital methodologies, ongoing regulatory changes, rating agency requirements and economic turmoil.
The enclosed update addresses how defined benefit pension plans in a number of countries (Brazil, Canada, Euro-zone, Japan, the U.K., and the U.S.) were impacted by capital market changes during the first quarter of 2010
The public hearing on the Level 2 implementing measures was held on 4 May 2010 in Brussels and a brief summary of the main points raised in the sessions are set out below.
An increase to the scope of tax restrictions on pension savings for high earners will go ahead as planned, despite industry protests. In its March budget, the U.K. government confirmed that the extension announced in December 2009 would proceed. Enabling legislation was included in Finance Act 2010 and rushed through before the U.K. Parliament was dissolved for the general election.
Insights: Healthcare and protection focuses on the health-related aspects of insurance and financial services, both products and service provision. In this issue, we consider: changes in the treatment of heart attacks in the UK and how that may impact survival rates that need to be allowed for in product pricing and valuation bases; the potential impact on the Italian health insurance market as a result of recent legislative reform; possible drivers for a change in approach to funding healthcare in the Netherlands; some of the sessions from the recent International Congress of Actuaries 2010 related to the healthcare markets of Germany, South Africa and New Zealand.
Statistics contains the recent history of past statistics as well as the new monthly figures.
In a further step in the evolution of the accounting for retirement benefits, the International Accounting Standards Board (IASB) has issued its long-awaited Exposure Draft (ED) of proposed changes to IAS 19, Employee Benefits.
In a further step in the evolution of the accounting for retirement benefits, the International Accounting Standards Board (IASB) has issued its long-awaited Exposure Draft (ED) of proposed changes to IAS 19, Employee Benefits.
The 2010 Global Workforce Study pinpoints a watershed moment in the evolution of the employment relationships in the UK. This podcast highlights the UK Executive Sumamary.
This edition of Pensions Digest brings together recent pension developments previously brought to you by Towers Perrin’s Monitor and Watson Wyatt’s Pensions News Filter.
On 15 April, the European Commission (EC) released a draft technical specification for QIS5 and various calibration papers. Veteran Solvency II watchers will recognise the structure and much of the content from the Final Level 2 Advice from CEIOPS. However, the EC has made some substantial reductions to the quantum of some of the stress tests envisaged by CEIOPS.
On 1 April 2010, Lloyd’s issued its detailed guidance notes for Phase 2 of the Solvency II dry run process. These supplement Lloyd's November 2009 guidance notes and seek to give practical guidance to managing agents in respect of the dry run process and wider Solvency II preparations. The guidance notes consist of a detailed introduction, followed by 9 sections covering delivery Phases 2.1, 2.2 and 2.3.
On 1 April 2010, Lloyd’s issued its detailed guidance notes on Phase 2 of the Solvency II dry run process which has been developed to supplement CEIOPS’ level 2 advice and FSA requirements with practical guidance to help managing agents meet the Solvency II requirements.
This section contains details of Lloyd’s best view of current requirements on governance. Solvency II brings new elements to the existing governance framework, including the internal audit function, risk management function and actuarial function, together with more general governance requirements.
Much of the detail contained within Lloyd’s guidance for Phase 2.2 of the dry run is similar to CEIOPS’ final advice on internal models (former CP56); Lloyd’s stresses that all managing agents are expected to have a thorough understanding of CEIOPS’ advice.
This section contains significant overlap with CEIOPS’ advice and the separate Lloyd’s guidance on Solvency II technical provisions. Solvency II will require major changes to technical provision reserving processes; managing agents need to be aware of all the key issues so that they can prepare for the many challenges of the new regime. The first test will be the compulsory QIS5 exercise during August – October 2010.
On 8 April 2010 CEIOPS delivered its final advice to the European Commission on the health SCR, non-life SCR and MCR calibrations. These areas were originally covered within the broader third wave of level 2 advice, but the final advice was delayed to enable CEIOPS to collect further data from Member States and to do further analysis.
The Equality Bill completed its passage through the Houses of Parliament late on 7 April 2010 and has now received Royal Assent. The Equality Bill will now be known as The Equality Act 2010 (the Act).
According to a Towers Watson survey conducted in early January, employers’ predictions for 2010 are mixed but guardedly optimistic — with a majority of organizations planning a renewed growth focus and some judicious hiring, while over a third will continue to make targeted workforce reductions.
On 31 March 2010, Lloyd’s issued its eagerly anticipated detailed guidance on technical provisions under Solvency II. This paper, which was reviewed by the LMA Solvency II working group, sets out Lloyd’s interpretation of CEIOPS level 2 advice on the valuation of reserves, identifies specific potential issues for Lloyd’s managing agents and suggests a number of practical solutions.
A comparative analysis of asbestos disclosures from annual reports on Form 10-K submitted by public corporations that are known to have been named in asbestos personal injury litigation
This Bulletin article provides a broad overview of the pricing methodology used on VA living benefit riders, with particular focus on the Guaranteed Minimum Withdrawal Benefit (“GMWB”) feature.
On the 31 March 2010 CEIOPS issued its first Level 3 guidance for Solvency II. The guidance is on the pre-application process for internal models and there are no significant changes from the draft guidance in CP80.
In this issue: 2010 Budget and executive pensions; Draft remuneration disclosure regulations for banks and building; So what are recently published FTSE100 remuneration reports saying?; IVIS and RiskMetrics; New UK guidance from RiskMetrics; 2010 Budget - more information with respect to executives.
On 30 March, the Pensions Regulator published its corporate plan for 2010-13. This includes new information on the regulator’s approach to scheme funding and to enhanced transfer value (ETV) exercises.
Statistics contains the recent history of past statistics as well as the new monthly figures.
The 2010 Global Workforce Study pinpoints a watershed moment in the evolution of the employment relationships in the UK. The Study reveals a number of areas where there is a ‘disconnect’ between what employees want and what companies are currently delivering – and the implications these have for leaders, managers, employees and HR.
The UK Chancellor of the Exchequer normally delivers the Government's pre-Budget report in November or December as a precursor to the main Budget in the following Spring. We have produced brief summaries of the Budget and Pre-Budget reports, which outline the more significant employee benefit-related issues.
In last year's Budget, the Government announced proposals to restrict high earners' pensions tax relief, from 2011. Those proposals were tightened in last December's pre-Budget report and following a consultation process that ended barely three weeks ago, the Government has now provided further detail on how the regime will operate.
This second edition of Pensions Digest brings together recent pension developments previously brought to you by Towers Perrin’s Monitor and Watson Wyatt’s Pensions News Filter.
On 15 March, the DWP published the Occupational Pension Schemes (Employer Debt and Miscellaneous Amendments) Regulations 2010, which are planned to come into effect on 6 April 2010. These Regulations are the culmination of the Government’s consultation last autumn on proposals to ease the operation of the Employer Debt requirements in cases of restructuring within a group.
HM Treasury and HMRC yesterday issued a formal consultation document on the taxation of insurance companies under Solvency II. The taxation of life companies is at present based on the regulatory reporting, so changes will be needed to the life company tax code.
Multinational pooling and captive benefit financing are increasingly important tools for multinational companies. By better leveraging your global purchasing power through pooling and captive arrangements, you can maximize cost savings for your employee benefit programs around the world and optimize non-financial benefits, such as improved service and underwriting.
In today’s transaction environment, companies are struggling to balance the need for talent, with the need to control costs and achieve other business objectives. Even those companies with strong balance may not succeed in building their talent portfolio to the extent desired without fully integrating their acquisition strategy into their overall talent agenda. This article discusses how companies can best shape their talent agenda in an M&A.
This publication focuses on understanding and exploiting the sources of competitive advantage in today’s rapidly changing financial services environment. This edition considers some of the themes that will shape the year ahead. Four key areas for 2010 have been highlighted: customer retention, retail distribution, Solvency II and the equity release market.
On 17 November 2009, CEIOPS was asked by the European Commission to set up a task force to develop technical solutions on the illiquidity premium, as well as the potential use of swaps as the base risk free rate, and the method for the extrapolation of the yield curve at long durations.
Statistics contains the recent history of past statistics as well as the new monthly figures.
Towers Watson research reconfirms that when organizations address people and culture issues early, strategically and with discipline, they improve their chances of achieving a more successful merger or acquisition deal.
Reliably measuring and benchmarking an organization’s safety culture leads to improved business performance. Towers Watson can help.
In this issue: Aviva Chairmen’s letter; Pension tax changes; Bank payroll tax – further details emerge; AIM rule change on directors’ remuneration disclosure; Voting results; Red and amber tops; Responses to income tax increase; Other plan changes; Defence of pay arrangements; UBS and “clawback”; Germany and new “say on pay” requirements; Germany and new regulations for financial industry; Belgium and new pay legislation.
Long-awaited regulations have been published that extend the circumstances in which high income individuals may have their pension savings protected from the special annual allowance charge. This follows a Government commitment last year to consider whether protection should be extended to cover, for example, new pension arrangements agreed before, but not established until after, the 2009 Budget.
In this edition of DC Direct Gary Smith interviews Amy Bell where they discuss the results of the 2010 survey of DC pension provision amongst FTSE 100 companies.
A recovering global economy brought mildly positive fourth quarter portfolio returns and strong full-year returns, well into double digits in most regions. Corporate bond yields generally increased
during the fourth quarter, but still ended the year well below year-end 2008 levels in most regions.
Employee well-being shouldn’t be driven by the economy; it should be an integral part of an organization’s culture, reflected in its benefit design, training and development policies, its employees’ ability to create work/life balance and in the way managers are expected to interact with and manage employees.
While many companies did whatever it took to survive during the recession – reducing head count, freezing salaries, suspending contributions to retirement plans, eliminating
training programmes – a number of organisations weathered the crisis particularly well, demonstrating resilience and maintaining consistently above-average performance.
The joint Government-industry Investment Governance Group (IGG) issued a consultation paper on its proposals to improve the investment governance of Defined Contribution (DC) pension schemes. These proposals cover all forms of work-based DC provision, from trust-based to contract-based and also AVCs.
Statistics contains the recent history of past statistics as well as the new monthly figures.
On 29 January 2010, CEIOPS delivered its final advice to the European Commission on the vast majority of areas covered by the third wave of consultation papers for Solvency II Level 2 Implementing Measures.
The new edition outlines recent developments in pensions — the passage of the Pension Protection Act of 2006 (PPA), the widespread shift toward defined contribution plans, and the burgeoning research literature, especially in economics and finance, on retirement and retirement plans.
This article, part of our ongoing series on embedding ERM in insurance, analyzes the capital management function’s roles and responsibilities, including collaboration with the risk management function.
On 2 February the Pensions Regulator published a consultation setting out standards for member records and requiring schemes that fall short to take steps to improve their performance. The consultation builds on guidance published in January last year, which provided a framework for the clarification and assessment of member records and follows extensive research over 2009.
This first edition of Pensions Digest brings together recent pension developments in the United Kingdom, previously brought to you by Towers Perrin's Monitor and Watson Wyatt's Pensions News Filter.
The findings of the fifth in a series of pulse surveys conducted in 2009, which assessed HR's role in achieving M&A success and the specific skill sets that enable HR to contribute most effectively during a merger or acquisition.
This is a study of the 13 largest pension markets in the world and accounts for more than 85% of global pension assets. The countries included are Australia, Canada, Brazil, France, Germany, Hong Kong, Ireland, Japan, Netherlands, South Africa, Switzerland, the U.K. and the U.S..
In this issue: Governance Code; Stewardship Code; ABI Position Paper; Risk Metrics Voting Policy Update; FSA Remuneration Code; Basel Banking Assessment methodology; Review of senior public sector pay; IVIS and RREV general approach; Amber tops/ contentious fors; Red tops/ against.
On the 28 January 2010 the Committee of European Insurance and Operational Pensions Supervisors (CEIOPS) issued consultation paper 80.
The Pensions Minister made a statement which could have significant cost implications for many defined benefit pension schemes, adding to the financial woes of the private and public sectors alike. In brief, legislation is to be brought forward which could require schemes to make specific adjustments to benefits to compensate for the effects of unequal GMPs. GMPs are ‘Guaranteed Minimum Pensions’, which a scheme that contracted out of the State Earnings-Related Pensions Scheme on the salary-related basis is required to provide for service before April 1997.
This paper outlines some of the main fees and terms we have come across in terms of real estate investing and how we would like them to change in order to produce a fairer deal for investors. Although some of the issues identified in this paper are specific to ‘opportunity’, ‘opportunistic’ and ’value-add’ strategies, the points we raise have wider implications and are applicable to all real estate vehicles.
There is no doubt that emerging markets continue to grow in importance in the context of a global economy, but investment solutions in this area are not simple. Over a number of years Watson Wyatt spent a considerable amount of resource examining the key economic drivers behind the emergence of the structural growth phenomenon taking place in countries such as China and India. Our findings highlighted the complexity many pension funds face when trying to address a portfolio allocation in this area.
The DWP has published its response to the consultation on what employers will have to do to comply with the requirements for employers to automatically enrol employees into work-based pension schemes. Some final regulations have been laid before Parliament.
Pensions Digest, Towers Watson's monthly publication brings together recent developments for pensions professionals.
Towers Perrin and Watson Wyatt have come together as Towers Watson, a global company that shares a common set of values and a singular focus: our clients.
Solvency II represents both a challenge and an opportunity for European insurers.
Fifteen extreme risks that would have a high impact on global economic growth and asset returns if they occurred. The events of the last two years have demonstrated that risk management cannot afford to stop at the 95th percentile and that ways need to be found to factor in very unlikely, but high-impact events.
This brief glossary of terms highlights expressions plan fiduciaries are likely to encounter in the course of fulfilling their investment responsibilities.
Companies that communicate with courage, innovation and discipline, especially during times of economic challenge and change, are more effective at engaging employees and achieving desired business results. Our research has consistently found the firms that communicate effectively with employees are also the best financial performers.
This article, part of our ongoing series on embedding ERM in insurance, describes an analytical framework that can be applied to an insurer’s internal measurement and management system to align value assessment, risk and capital management.
Frequent recognition is like applause; it rewards the accomplishment in real time.
Insight on boardroom pay and incentives in the United Kingdom.
Insurance companies remain convinced that enterprise risk management delivers rewards, but many continue to struggle with integrating ERM into their business.
Companies with highly engaged employees generate more marketplace power than their competitors.
In this rewarding conversation, Gary Smith is joined by Ray McKenna where they discuss the increasingly important world of Defined Contribution pension schemes in Ireland.
In a pre-Budget statement notable as much for what heavily-trailed measures it didn’t include (for example much-heralded capital gains tax (CGT) changes) as for what it did, the big news from a pensions perspective was the publication of a consultation document covering the mechanism for limiting pension tax relief for high earners from April 2011 and a consequential immediate change to the anti-forestalling provisions.
Throughout 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued draft formal advice on Solvency II Level 2 implementing measures for consultation. We have produced a short summary and analysis of each consultation paper released which we hope that you will find useful.
On 30 November 2009 CEIOPS issued its draft advice on the technical criteria for assessing third country equivalence (to the Solvency II regime) in relation to three specific articles of the Solvency II directive. For each article the paper sets out the principles and objectives that a third country will have to meet in order to be considered equivalent and then lists out detailed indicators of equivalence. These indicators are linked to the relevant articles of the directive.
Solvency II not only demands masses of extra reporting from insurers to be produced in much shorter time periods, it also expects this to be much more rigorously controlled and documented. How are actuarial business processes and technology responding?
On 10 November 2009, CEIOPS delivered its final advice to the European Commission on the vast majority of areas covered by the first and second round of consultation papers for Solvency II Level 2 Implementing Measures. Consultation on the first two rounds took place from March to September 2009. The third wave of consultation papers was released on 2 November 2009, and so is not covered by this advice.
On 2 November 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued the third set of draft formal advice on Solvency II Level 2 implementing measures for consultation. We have produced a short summary and analysis of each consultation paper released which we hope that you will find useful.
We analyses the impact of these, including a reduction in diversification benefits
On 2 November 2009 CEIOPS issued the third set of draft formal advice on Solvency II Level 2 implementing measures for consultation (CP63 to CP79, although CP78 has not been published as yet).
This involves generating risk drivers with a specific impact in insurance companies and then modelling their impact on different risks. Hannes Janse van Rensburg elaborates.
The ones to watch are on correlations, market risk and equity risk, says Mark Chaplin. And the industry should prepare for more rule-tightening.
Insurers must reduce the number of risk models and risk measures which they use because they are often inconsistent with one another, says Mark Chaplin, global head of risk and value services.
This edition takes stock of where a hypothetical insurance company might be in its preparation for Solvency II, and gives a possible roadmap (or implementation plan) for the work that lays ahead.
On 2 July 2009 CEIOPS issued the second set of draft formal advice on Solvency II Level 2 implementing measures for consultation.
On 2 July 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued the second set of draft formal advice on Solvency II Level 2 implementing measures for consultation (CP37 to CP62).
The FSA recently sent a letter to Chief Executives of insurance companies in run-off asking for information on their Solvency II preparations.
Graham Fulcher comments on the postponement of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) consultation paper on partial internal models from the July-September consultation period to November-December.
Sanjiv Chandaria explains how the latest developments regarding the framework directive impact the run-off market.
(Re)insurers will have to prove that their internal models are up to the task, explains Graham Fulcher.
Time is running out for actuaries to prepare for the whirlwind of changes swept in by the implementation of the Solvency II legislation, says Sanjiv Chandaria and Dean Swallow
Today the FSA published a feedback statement summarising the responses to "DP08/04 Insurance Risk Management: The Path to Solvency II" and providing comment on them. The feedback statement follows the same structure as the DP and considers each of the questions raised in the DP in turn.
On 26 March 2009 the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued the first set of draft formal advice on Solvency II Level 2 implementing measures for consultation.
On 26 March 2009 the Permanent Representatives Committee of the Council of the European Union (COREPER) reached an informal agreement on the compromise Solvency II Framework Directive (the first of three main levels of legislation defining the Solvency II regime).
A brief illustration of the benefits of capital models to legacy organisations by Rob Collinson and Sanjiv Chandaria of the Non-Life Insurance team. In association with Insurance Day.
Statistics contains the recent history of past statistics as well as the new monthly figures. It is published and updated every month; this is a compilation of 44 economic indicators and other useful statistics, with tables of data, including Retail Prices Indices (RPI), Consumer Prices Index (CPI)*, Average Earnings Index (AEI), National Insurance (NI), Section 148, Bank Base Rates and Pension Scheme Earnings Cap.
*Please note: CPI and CPI Annual Inflation have been included from the July 2010.
Roundtable partners Barrie & Hibbert and Towers Watson, together with industry leaders, recently took part in a unique forum that discussed the modelling and systems challenges of Solvency II.
The credit crunch shows which companies were best prepared, argues Graham Fulcher.
Quarter 2/Solvency II round-up - Insurance Day special report
Developing an internal model can be a prolonged and challenging process. However, a good quality model can form an important part of a company’s risk management toolkit. Many companies will want to use internal models for calculating regulatory capital when the European solvency regime (Solvency II) comes into force.
As adoption of the Solvency II Framework Directive draws nearer, we consider whether this significant update to the the European (re)insurance solvency regime will really change anything, in particular for UK insurers already operating under the FSA ICAS regime.
CEIOPS has published an Issues paper on the 4th of November 2008 entitled ‘Implementing Measures on System of Governance’.
On 20 October the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) presented to its stakeholders the main preliminary results of the fourth quantitative impact study (QIS4) and provided a brief update on the Solvency II timetable. Some highlights of the discussion at the stakeholder meeting are set out below.
Insurers may look at reassessing their support for market-consistent measurements of financial risk in the light of the current financial turmoil, according to Towers Watson.
While the concept of Enterprise Risk Management ("ERM") has been around for many years, activity has intensified in recent times due to increased focus from ratings agencies, regulators, supervisors and investors and as a result of leading insurance groups extolling its virtues.
Richard Bulmer and Dean Swallow look at some of the issues and challenges facing insurers in the run-up to implementation of Solvency II.
On the 25 September 2008, the FSA issued Discussion Paper 08/4 "Insurance Risk Management: The Path To Solvency II". The Discussion Paper (DP) appears chiefly aimed at reducing any complacency there might be in the UK insurance industry about Solvency II resulting from the seemingly distant October 2012 target implementation date and the headstart over much of Europe that the SYSC and ICAS requirements have potentially generated.
The FSA has recently published a briefing on risk and capital management, following its November 2006 briefing on insurers' risk management and its October 2007 briefing on progress with the ICAS regime.
[First published by Complinet and reproduced with their permission] - Insurers are awaiting certainty on equivalence criteria for jurisdictions outside the European Economic Area in relation to group support within Solvency II, according to actuarial experts.
The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) formally launched Quantitative Impact Study 4 (QIS4) on 1 April.
Key issues faced by insurers in implementing the internal models that have challenged European insurance companies preparing to meet the requirements of Solvency II.
While the majority of UK insurers say they will participate in QIS4 in some capacity, only a third will be undertaking advanced recalculation in line with the QIS4 specification, according to a survey by leading global consultants Towers Watson.
Highlights from the Quantitative Impact Study 4 (QIS4) draft technical specifications.
Towers Watson survey which looks into insurers preparation for Solvency II.
Key points from CEIOPS Report on the third Quantitative Impact Study (QIS3).
Mark Chaplin examines some of the aspects of Solvency II which, while receiving little attention to date, could have a profound effect on the impact of the new European regulatory initiative.
An outline of the proposed text from the European Commission to be used to implement the Solvency II supervisory regime.
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