Global Insurance Risk and Regulatory Taskforce Training
Solvency II is alive and kicking in! In November 2013 an agreement has been reached at European level on Omnibus II. Following this agreement, a formal vote on Omnibus II was cast in February 2014, which formalized the full Solvency II implementation date of January 2016.
In the meantime the European Insurance and Occupational Pensions Authority (EIOPA) and national insurance supervisors are expected to impose interim regulation for the capitalization, risk management and risk disclosure of insurance companies as of 2014. This is causing insurance companies to place renewed focus on their Solvency II readiness across the market.
Updated specifications will be circulating early 2014, and therefore we like to offer our clients the opportunity to learn the key 'what do I need to do's' in our Global Insurance Regulation and Risk Transformation training program.
In the last 8 years, we have trained over a thousand insurance and asset management clients and colleagues globally on the Solvency II framework. With the changing regulatory landscape, we have launched a new setup for our successful training program last November 2013.
In this new setup we combine basic content and advanced topics to allow individuals from clients and EY to participate only for those themes they are most interested in. All participants will receive pre-course materials to prepare for the training modules. This is to ensure that all participants have similar starting positions for the modules, and the basic guidelines of Solvency II do not need to be reiterated.
The training program consist of six blocks of four hours each in three consecutive days covering a range of topics that are most relevant in the area of Insurance Regulation and Risk Transformation. The sessions are aimed to have an interactive character, with case studies and discussions that have a central position.
Participants can register for one or more training blocks. Individuals that have registered for 3 or more modules will not only get a discount, but also get user access to a laptop to refresh and/or update their knowledge on the Solvency II basics and recent regulatory changes by means of our e-learning module “Solvency II – general overview”.
The course will be held on 12,13 and 14 November at the EY office in Lisbon,Portugal.
Day 1, November 12 2014
09.00 – 13.00 (Module A)
Models and methods – calculating your MCBS and SCR under Solvency II
14.00 – 18.00 (Module B)
Audit, Finance & Control of the future
Day 2, November 13 2014
09.00 – 13.00 (Module C)
Risk management policies, practices and effectiveness – putting the ORSA in practice
14.00 – 18.00 (Module D)
Enterprise risk management and risk transformation
Day 3, November 14 2014
09.00 – 13.00 (Module E)
External reporting and data management
14.00 – 18.00 (Module F)
Data quality and IT in the new regulatory environment
A. Models and methods – calculating your MCBS and SCR under Solvency II: November 12, 09.00 – 13.00
In the new regulatory environment that insurance companies are facing, there is a strong focus on market value and risk based capital. During this module, we will discuss the main balance sheet items that are affected by the transition towards market (consistent) values – the market consistent balance sheet (MCBS). Hereby we will illustrate this change via a live case study whereby we will discuss the MCBS of a Life and Non-life insurer. We will set out the approach to derive the own fund items and the restrictions that can be applicable. Next we will discuss the treatment of the different assets and liabilities under the Solvency II Standard Formula framework, and how the Solvency Capital Requirement (SCR) should be derived. Through a Life insurer and Non-life insurer case study the participants gain ‘hands on’ experience in analyzing SCR figures. Furthermore the consolidation of the Life insurer and the Non-life insurer will be discussed, going through the challenges that are faced during this process.
Agenda module A:
- Market Consistent Balance Sheet
- Own funds
- SCR calculation – checks and balances
- Group consolidation
Following this training module, participants should be able to get a better understanding of their figures, including the MCBS and the SCR. The case study will help non-actuaries to get a better grip on the content. The module is designed for those working in the insurance industry, accountants, risk managers, actuaries as well as middle or senior management.
B. Audit, Finance & Control of the future: November 12, 14.00 – 18.00
In the last decade there has become an increased demand for risk and capital information in financial statements (economic values, market consistent values). These values are not realized gains or losses but values based on future cash flow projections, estimated and sometimes subjective parameters, model choice, (risk)data vendor selection et cetera. The range of possible reasonable outcomes could be, as a result, quite large. Is there a need for different view on 'right or wrong', and hence on materiality?
During this module an overview is given in relation to the Market Consistent Balance Sheet (MCBS) and Economic Capital (EC). EIOPAs view on external assurance will be discussed in relation to the MCBS and EC. Following this, the concept of derived value of change (DVOC) is set out, which can help to evaluate modelling differences. This module will help you dealing with three important questions to ask yourself:
- Is your current audit approach sufficient for auditing economic values and risk model outcomes?
- Does your internal audit department possess sufficient and appropriate expertise to do this? Are there enough people who are able to interpret outcomes of mathematical models?
- Are the ‘new’ values and risk metrics accepted within the organization? Quality alone is not enough.
Agenda module B:
- EIOPA view on external assurance
- Sensitivities Market Consistent Balance Sheet (MCBS) and Economic Capital
- Materiality background
- Derived value of change (DVOC) concept
- Model materiality, model uncertainty and parameter uncertainty
- SCR controls and Profit & Loss attribution
C. Risk management policies, practices and effectiveness- putting the ORSA in practice: November 13, 09.00 – 13.00
During this module we will discuss the ORSA Process and Report in detail, including emerging leading practices.
Agenda module C:
ORSA Policy – framework and lessons learned
- Governance requirements for the ORSA Process
- ORSA Process requirements
- Risk management, strategy and capital management for the ORSA report
- Standard Formula and the individual Risk Profile
- Future MCBS and Capital projections
- Scenario setting and performing stress testing
- IMAP and Supervisory instruments
D. Enterprise Risk management and risk transformation: May 21 / November 13, 14.00 – 18.00
There is hardly any value in having a risk management framework and capability if it is not effective in operation. Most major insurance territories have explicit or implied requirements for having effective systems of governance and effective management of risk. The degree of supervisory pressure/focus on demonstrating compliance varies considerably throughout the world. Regulatory developments suggest a desire to have improved effectiveness but they are not always fully aligned / transparent. The latest guidance from EIOPA (March 2013) emphasizes the high-level “effectiveness” requirement. Both information and action are critical. Even in the absence of regulatory pressure, why would CEOs not want more effective management of risk? During this training module, we will go into detail regarding the integration of risk management.
Agenda module D:
- Integration of risk management
- Risk process alignment
- Risk Transformation
- Structural reform and optimization
- Enterprise Risk Management (ERM)
E. External reporting and data management: November 14, 09.00 – 13.00
The Solvency II reporting requirements are very demanding, with data requirements that are going far beyond what was asked for under Solvency I regulation. Currently all across the market insurance companies have started with their own reporting and data management projects. This module will give an overview of how insurance companies are actually dealing with these new requirements and challenges that need to be overcome. The basic Solvency II Pillar 3 requirements are assumed to be known by participants. During the training program a parallel will be made with the IFRS 4 reporting. Through a case study you will have ‘hands on’ experience on the reporting requirements.
Agenda module E:
- Pillar 3 requirements
- Narrative reporting in SFCR/RSR
- Quantitative Reporting Templates (QRTs)
- Analysis of Change
- Comparison with IFRS 4
- Case Study: Reporting requirements
- Pillar 3 challenges & project approach
F. Data quality and IT in the new regulatory environment: November 14, 14.00 – 18.00
In this module we will discuss the data quality and IT in the new regulatory environment. What does this means for your business? And what do you need to get your data ‘in control’? We will demonstrate data quality tools and our data governance approach, based on real world cases. This will give you practical guidance that you can apply in your daily practice.
Agenda module F:
- Data quality requirements
- Internal controls and dealing with Excel usage and other EUC
- IT aspects for data quality
- Getting ‘in control’ of your data
- Market insights & challenges
- Demonstration: Data quality tools and data governance approach
- Reporting systems and data vendor survey
Each module is designed for all individuals active in the insurance industry. Auditors, controllers, risk managers, actuaries as well as middle or senior management. Even when one topic is not your core focus, having learned the key take aways significantly improve the needed cooperation between the various professions.
The training is also interesting for those employed at banks, pension funds or asset/investment managers given the similarities with Basel II for banks, the potential developments of risk based regulation for pension funds across Europe as well as the impact of Solvency II on asset managers and other asset service providers.
The training modules go beyond the materials covered in the Solvency II training program we have organized for 8 years, and overlap between our Solvency II training program and the Global Insurance Regulation and Risk Transformation training program is limited.
Upon request, we organize the modules set out above, as well as the Solvency II Complete training and the Solvency II Advanced training that we have organized in previous years in house. This way we can further tailor the training program to your needs. Please contact us directly for more details.
The general EY training conditions are applicable on these training modules.
Note that the content of the training modules set out on this website gives an indication of the topics covered. EY has the liberty to make minor changes to the actual content covered, for example to take account of the latest changes in insurance regulations.