Solvency II Compliance
Solvency II is a European Union Directive that covers over 30 countries. It is the biggest ever exercise in establishing a single set of rules governing insurer credit worthiness and risk management. It stipulates that insurance companies need a certain amount of capital in order to take risks from its policyholders. The capital is determined according to a set of solvency regulatory principles and rules.
Solvency II is similar to Basel II, and is based on a 3-pillar approach:
- Pillar I - Specifies the quantitative requirements
- Pillar II - Sets out requirements for the governance and risk management of insurers
- Pillar III - Focuses on disclosure and transparency requirements
MetricStream Solvency II Compliance Management Solution
American insurers with parent companies in the EU will have to follow Solvency II requirements such as calculating the SCR and MCR, building a risk management framework, developing internal models, conducting an Own Risk and Solvency Assessment (ORSA), and meeting documentation and reporting standards. US parent companies with European subsidiaries will also need to meet Solvency II requirements.
With the 2012 deadline approaching, and the focus on risk management increasing, insurers are realizing that Solvency II requires a significant transformation of their organizations, processes, and information technology (IT) systems. There are other regulations that require compliance, and it is important to choose the right kind of IT solution that will help manage global regulations.
MetricStream offers a Solvency II solution that enables insurance companies to follow a streamlined approach to risk and compliance management. The solution is provided on a centralized platform, allowing insurance organizations to manage all their risk and compliance needs using a single point of reference. The solution offers an integrated approach that improves collaboration across the enterprise, avoids duplication of resources and effort, and reduces costs. At the same time, it allows independent responsibilities to be assigned to specific individuals, thereby increasing accountability.
MetricStream was an amazing source of support through the whole process, leading up to go-live day.