Georgie Patten, CA(SA)
Solvency II Specialist
Georgie Patten works with internal product specialists, Clearwater’s client servicing division, and insurance industry specialists to understand the needs of investment and accounting professionals and the current insurance investment environment. Georgie has extensive knowledge of the challenges that insurers face, especially in the changing regulatory environment of Solvency II.
Georgie is a Chartered Accountant with an Honours Degree in Accounting from the Nelson Mandela Metropolitan University of South Africa.
EIOPA recently released its 31 July 2015 progress report, Equivalence assessment of the Bermudian supervisory system in relation to articles 172, 227 and 260 of the Solvency II Directive.
This report, requested by the European Commission, evaluates the progress of the Bermuda Monetary Authority’s (BMA) legislative efforts to respond to the Solvency II “partial equivalency” issues identified by EIOPA in March 2015. The report provides advice to the European Commission, which is the regulatory body that will actually make the decision later this year. However, it refrains from explicitly stating whether Bermuda’s solvency regime is equivalent to Solvency II, instead commenting on the various amendments the BMA has passed over the past several months in an effort to improve its Solvency II equivalency.
Public Disclosure
One notable amendment that EIOPA found to “largely mirror” Solvency II is the new public disclosure requirement for Bermuda insurers. The Insurance Amendment (No. 2) Act 2015 grants the BMA the power to set standards on public disclosure (amendment to section 6A Insurance Act). In addition to the BSCR, Financial Reports, and other filing obligations, the BMA now requires all commercial insurers and insurance groups to publish a Financial Condition Report (FCR) on their website.
Each insurer’s published FCR must contain six sections:
- Business and Performance: Particulars regarding the organisational/group structure, its insurance business activities, and financial performance.
- Governance Structure: Particulars regarding the corporate governance, risk management, and solvency self-assessment frameworks.
- Risk Profile: Particulars regarding exposures on underwriting risk, market risk, credit risk, liquidity risk, operational risk, and other material risks. This section shall also include information on how these risk areas are assessed and managed.
- Solvency Valuation: Particulars regarding the valuation bases, methods, and assumptions on the inputs used to determine solvency.
- Capital Management: Particulars regarding an assessment of their capital needs and their regulatory capital requirements.
- Subsequent Event: Any significant event which takes place after the financial year-end and before the filing of the FCR with the Authority as part of its annual filings. To ensure compliance, the BMA instituted a $1,000 – $5,000 penalty for each week that an insurer fails to comply with these requirements.
The full EIOPA report is available on the EIOPA website. Contact Clearwater to learn how we support Bermuda insurers with regulatory, accounting, and analytics reporting.