With the Solvency II Taxonomy 2.0.1 out, we are almost at the end of the long series of taxonomies that we have encountered in this last year. Every ending, however, is a new beginning, and with the first live filing looming in April 2016, the tougher challenges are yet to come.
Solvency II Pillar 3 reporting has taken quite some time to get to this stage. In its original timeline, Solvency II obligations should have started applying to insurers and reinsurers on 1st November 2012. That got pushed to 1st January 2014, which again stretched to 1st January 2016. It’s been a long wait, and although this may amount to counting the chickens before they hatch, it seems as if this time, we are on course for the planned application of Solvency II.
One of the things that Solvency II has gotten insurers and reinsurers to do is take a long hard look at their risk assessment methodologies and ensure that they remain prudent and sufficiently capitalized to handle large risks. Assessing own risk and solvency across a relatively long time period horizon will enable insurers to take better decisions and corrective action, if required, in strategy and execution.
Pillar 3 Reporting, meanwhile, attempts to modernize reporting by enforcing the use of the world’s pre-eminent electronic data format for business data reporting – XBRL. In asking insurers and reinsurers to file their quantitative information in XBRL, the EIOPA attempts to standardize the data that filers submit in order to reduce filing effort and to extract downstream advantages, chiefly, quicker and more effective comparative analysis.
It is a nervous time for all stakeholders. It is not easy to administer a standard regulation to a large number of large organizations across multiple countries, and it has taken its fair share of time. Now, all we need to do is wait.
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