Thursday, 13 October 2011

Solvency II/FSA reference documents catch-up

Thanks to a dodgy laptop, I am a bit behind with blogging, although to be fair all of the real drama happened last week! I came across a number of handy documents this week which you might find handy, listed below;

Clifford Chance document "Guide to the European Union" - very useful if you have board training/briefing requirements and need to explain why Solvency II is taking so long!

Lloyds ORSA Guidance - in order to assist their syndicates in preparation for their December ORSA submissions, but obviously useful for all of us. In particular, they are not asking for a a great deal (15-25 pages), which seems a touch light, but probably proportional for a lot of syndicates.

SCOR Presentation at banking conference - Some cracking stuff in here related to risk, capital deployment and strategy in preparation for Solvency II. Model enhancements for Solvency II, diversification benefits, and risk appetite all touched upon in the slides, and should give you some good ORSA/MI ideas.

Milliman paper on Pillar III - Nice summary on the forgotten pillar and likely requirements!

Milliman legislative update - Generic and very useful Solvency II  presentation from Messirs Claffey and Coatesworth which again should be useful for anyone who needs to explain to their Boards what the hold up is! Three slides on proposed timeline divergence between Parliament, Commission and Council are very sobering...

FSA Newsletter - Fresh from the horse's mouth, the Solvency II update (including last week's news on internal model application timeline changes) confirms that "we must maintain the momentum and stay focused on implementation", despite adding as much as 14 months onto some firms' model submission windows! The Small Insurers Seminar on October 20th sounds like it will be a hoot. Also a nice piece on reverse stress testing which should help anyone in ORSA land.

PwC piece on FTSE 350 strategic/risk reporting - Claims that, having studied the FTSE 350, less than half explain the impact of identified risks to their business model (despite almost all detailing what their principal risk are), and subsequently portrays the downside of this being felt in a marked-down share price.

Gender diversity on boards feedback statement from the FRC- a topic I have blogged on before, and one which is seemingly the zeitgeist. This came out almost hand-in-hand with the Cranfield school monitoring report on Women on Boards which is reasonably critical of progress to date (bearing in mind the political pressure commenced around February).

From a Solvency II project planning perspective, the issue in hand is reconciling the Fit and Proper requirements in the System of Governance articles with "decision making bodies" in 2014/15 being artificially loaded with female Execs/NEDs/function holders. Likely that I will blog more extensively on this from a pure governance perspective another time, but some good media comment already out on this document (see here and here).

GCAE minutes for September - Quiet month by the looks of it, though it does mention that at the International Actuarial Association meeting in Zagreb, they discussed ORSA and ERM "including the need for educational material and standards" - land grabbers!

FSA ask risk and internal audit to "step up" - Slightly provocative language from Andrew Bailey, where wimpy Internal Audit and Risk functions appear to be the "untold story" of the financial crisis (provocative but pretty fair?). His point on the role and influence of both functions not being as it should be is also fair, though I would have some truck with the suggestion that companies want the FSA to do risk and internal audit for them (I would actually rather they discharged their Solvency II obligations in a timely manner, cheeky beggars!)

"First Class" FSA - last but not least, delightful story on how much it costs to fly the FSA Chair and Chief Exec around - it certainly puts my annual Flybe bill in the shade, though there isn't a business class option to be fair!

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