ABI by Fr124c

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									                                                                                                                                          06/12/2011



                                            Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                                    Supervisory Review Process and Undertakings’ Reporting Requirements
       Commentator: Association of British Insurers
     Reference Comment


1.   General comment


     General
           2.   The Association of British Insurers (ABI) welcomes the opportunity to submit comments on the Issues Paper on Supervisory
     comment    Review Process and Reporting Requirements.


          3.    The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market
                in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK‟s capital. They are the risk
                managers of the UK‟s economy and society. Through the ABI their voice is heard in Government and in public debate on
                insurance, savings, and investment matters.


          4.    1) Overall, whilst we agree that public disclosure is an important element of the Solvency 2 regime, we believe it should be
                assessed against the following criteria:


                -   Public disclosure should not put at stake the confidentiality principle and certain pieces of information, which are
                    commercially sensitive, should remain private between firm and supervisor. Following article 52 of the Framework Directive,
                    there is a key principle that a piece of information, which could potentially give away competitive advantage to other firms
                    through disclosure, should not be disclosed in the public domain.
                -   Public disclosure should be set at a high level while the detailed information should remain private.
                -   Forward-looking information or information used for internal purposes, both commercially sensitive, should not be subject to
                    public disclosure. Past information or information already available to the public on the other hand could be more easily
                    disclosed.
          5.    We provide suggestions from the UK industry regarding the split between private supervisory reporting and public disclosure in
                our Annex.



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                                       Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                               Supervisory Review Process and Undertakings’ Reporting Requirements
  Commentator: Association of British Insurers
           2) We are concerned about the amount of information that the industry may be required to report. We believe the collection and
           submission of information needs to be efficient and effective. To that end we would suggest the following:
           -   There should be a “no duplication” rule as a lot of the information required in the paper will already be in existence and/or in
               the public domain through reports, accounts etc. We would also expect that through the ORSA process firms will furnish
               supervisors with much of the information they need. Only the information not reported through this channel should be asked
               for.
           -   All information should have a clear use when sent to the supervisor and/or disclosed and any changes to the requirements
               should be subject to appropriate cost-benefit analysis. Collecting and preparing information is not free for companies. The
               benefits of the data reporting should be clearly demonstrated.
           -   The materiality of the information required should be taken into account.
           -   No reporting should be required if the information is not going to be analysed by the supervisors. Where information ceases
               to be useful, we believe there needs to be a mechanism for removing the requirement for collection.
           -   There should be appropriate use of „reporting by exception‟.


           3) We agree proportionality is a key principle of the supervisory review process, although certain common minimum standards
           are likely to be necessary, certainly for large, complex groups. We also believe that common requirements should be agreed for
           public disclosure at the European level.


           4) Supervisors should not, normally, interfere with business strategy; the supervisory review process should be driven by an
           analysis of key risks and exposures and an assessment of the business strategy . Tools such as early warning indicators may
           help supervisors assess the firm‟s processes and controls but they should not be considered as a hard target and should not
           prevent firms from managing their business in the way they feel appropriate.
Detailed comments


Para 1.3   The UK industry looks forward to engaging in further dialogue with CEIOPS about how the SRP will actually work in practice for
           a Group.


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                                        Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                                Supervisory Review Process and Undertakings’ Reporting Requirements
  Commentator: Association of British Insurers
Para 1.7    We believe it is essential to achieve an appropriate balance between the private Report to Supervisors (RTS) and public
            information. Forward-looking information and key details of risk management and mitigation strategies will need to be kept
            private.
Para 1.8    We support the principle that full narrative information is not likely to be required every year.
Para 3.2    We strongly support the principle set out in this paragraph that "a clear idea of what and why information is needed in order to
            perform the future supervisory review process and to foster market discipline".
Para 3.9    2nd bullet
            If the MCR is dependent on the SCR (e.g. through the corridor approach) it would be appropriate to use more approximate
            methods to calculate the „interim‟ SCR unless there is a material change in the risk profile of the company (which would in any
            event trigger a re-calculation of the SCR under the Directive).
Para 4.5    6th bullet
            We would expect that external reports should normally be prepared in conjunction with the firm and only in exceptional
            circumstances should a supervisor impose a requirement for a third party report.
Para 4.6    We feel that supervisors‟ power to "... request and access all information needed for the purposes of supervision" should be
            subject to a “reasonableness” test, both in terms of the nature and quantity of information and the timescale given to provide
            the information.
Para 4.21   Last sentence
            We think the wording, based upon "weaknesses" may be unhelpful. A well-managed, low risk firm should be able to
            demonstrate it has an understanding of the more extreme risks and tail dependencies that could pose a serious threat to the
            viability of the firm and explain how they would manage in such extreme situations. Clearly the degree of analysis and data will
            be much less than for risks within the SCR standard of 1 year/99.5% VaR.
Para 4.35   We agree with the importance of having „appropriate monitoring tools‟ in deteriorating financial conditions. However, this should
            not lead to significant additional reporting requirements for firms. We are also concerned that such information must be
            protected.
Para 4.38, General comment
4.39    &



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                                           Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                                 Supervisory Review Process and Undertakings’ Reporting Requirements
   Commentator: Association of British Insurers
4.40
         This is a useful indicative checklist. We imagine firms would, in most cases, already monitor these indicators on an ongoing
         basis and report them to supervisors by exception. To be meaningful, these indicators should be kept private.
            We agree with the statement that „these early warning indicators should not however function as a new solvency control level‟.
            We believe these indicators can be helpful for internal purposes and constitute a tool to manage risks and help to identify and
            manage in deteriorating financial conditions. Therefore, whilst we agree such indicators will be relevant as part of the
            supervisory review process, we believe supervisors should not interfere with the management of the business and should not
            act as „shadow directors‟.
            It might also be relevant to add to this list other aspects:
            -   Reinsurance and risk appetite;
            -   Failure of counterparty;
            -   Re-rating;
            …
Para 4.39   Bullet c)
            Declining profitability will not always be a danger sign and may be a consequence of other deliberate management action, such
            as de-risking or shrinking the business in difficult times.
            Bullet d)
            „Low profitability‟ appears to largely overlap with bullet c) „declining profitability‟.
            Bullet i)
            This indicator on the number of consumer or intermediary complaints could be hard to measure.
Para 4.40   Bullet h)
            We are unclear how this will actually work in practice („evidence of poor management‟).
Para 5.7    The assessment of investment performance should take into account the nature of the liabilities, policyholder expectations and
            adequacy of overall resources. It is important that the supervisor‟s role does not move beyond supervisory review to interfere
            with how the firm manages its own business.



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                                        Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                                Supervisory Review Process and Undertakings’ Reporting Requirements
  Commentator: Association of British Insurers
Para 5.11   Bullet c)
            We would understand the liquidity of assets to be considered in relation to the liabilities (linked to UK style annuities, e.g. bonds
            held to maturity and when policyholders have no surrender option) as well as „the amount that they expect to receive when
            assets are liquidated in stressed situations…‟
Para 5.32 General comment
to 5.34
          We would be interested in some further information from CEIOPS on what they expect to see from firms in practice.
            We believe that a distinction should be drawn between intra-group “out-sourcing” and the use of unconnected third parties.
            We are also concerned that regulators should apply a consistent approach and not treat out-sourcing more harshly in some
            jurisdictions than others.
Para 5.47 General comment
and 5.48
          We believe the ORSA is aimed at regulators and should therefore be mostly kept private. If the outcomes of the ORSA were to
          go in the public domain it would be much more anodyne than if restricted to supervisors. We would imagine however that some
          of the elements necessary to perform the ORSA could be publicly disclosed, possibly at the discretion of the firm. Supervisors
          should not have arbitrary power to disclose information and other than in extreme circumstances the firm should be advised of
          the intention to disclose new data and given an opportunity to respond.
Section 6   General comment
            We believe a balance should be struck between the harmonisation and the proportionality principles, with common minimum
            requirements for public disclosure.
            It will be important to minimise overlap with existing disclosures, such as accounts and annual reports, as they are already
            extensive and mirror much of the information proposed in the Annex 1. To be in line with the accounts reporting we would
            suggest a year-end supervisory reporting and a yearly public disclosure.
            We offer our view on the potential split between supervisory and public reporting in our Annex.
Para 6.16   The requirement for disclosure in a period no longer than 2 weeks feels unduly restrictive. If the event were, for example, a
            large mortality shift, it could take considerably longer to properly assess the impact. We would suggest amending this wording
            to remove any specific time thresholds, and to be “in a timely manner, appropriate to the nature and scale of the event”.



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                                        Comments on CEIOPS Issues Paper CEIOPS-IGSRR-18/08
                                Supervisory Review Process and Undertakings’ Reporting Requirements
  Commentator: Association of British Insurers
Para 6.17   General comment
            We wish to stress the importance of „materiality‟ when reporting the changes referred to in this paragraph.
            We would imagine some of these points to be part of an ongoing dialogue with supervisors or to be already covered by the
            ORSA process.
            Bullets d), e), g) and I)
            Some further guidance would be helpful to have a better understanding of what CEIOPS expects to be reported under „lawsuits‟,
            „changes in business strategy‟, „new emerging risks‟ and „governance failures‟.
            Bullet j)
            We would not expect business as usual changes to bonus distributions, even if material, to be reported. We would welcome
            more clarity about what CEIOPS expects in practice. Again, reporting „by exception‟ will be an important principle here.
Para 6.22 We believe the safeguards depend on the nature and type of information being disclosed, and where it is being disclosed.
(the      Where there are specific legal requirements, then external audit would be appropriate, as is now the case for report and
„box“)    accounts and regulatory returns. However, beyond this we feel it is the responsibility of the Board to sign off and decide if any
          further assurance is required.




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                                                                                        October 2008




                                             APPENDIX


                                   REPORTING TEMPLATE
                                Indicative guidance on reporting

The UK industry wishes to provide suggestions regarding the split between private supervisory
reporting and public disclosure based on the reporting template displayed in Annex 1 of CEIOPS‟
Issues Paper.


Overall, whilst we agree that public disclosure is an important element of the Solvency 2 regime, we
believe it should be assessed against the following criteria:

-   Public disclosure should not put at stake the confidentiality principle and certain pieces of
    information, which are commercially sensitive, should remain private between firm and supervisor.
    Following article 52 of the Framework Directive, there is a key principle that a piece of information,
    which could potentially give away competitive advantage to other firms through disclosure, should
    not be disclosed in the public domain.
-   Public disclosure should be set at a high level while the detailed information should remain private.
-   Forward-looking information or information used for internal purposes, both commercially
    sensitive, should not be subject to public disclosure. Past information or information already
    available to the public on the other hand could be more easily disclosed.
We are concerned about the amount of information that the industry may be required to report. We
believe the collection and submission of information needs to be efficient and effective. To that end we
would suggest the following:
-   There should be a “no duplication” rule as a lot of the information required in the paper will already
    be in existence and/or in the public domain through reports, accounts etc. We would also expect
    that through the ORSA process firms will furnish supervisors with much of the information they
    need. Only the information not reported through this channel should be asked for.
-   All information should have a clear use when sent to the supervisor and/or disclosed and any
    changes to the requirements should be subject to appropriate cost-benefit analysis. Collecting and
    preparing information is not free for companies. The benefits of the data reporting should be
    clearly demonstrated.
-   The materiality of the information required should be taken into account.
-   No reporting should be required if the information is not going to be analysed by the supervisors.
    Where information ceases to be useful, we believe there needs to be a mechanism for removing
    the requirement for collection.
-   There should be appropriate use of „reporting by exception‟.




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                                                                                       October 2008




      A. BUSINESS OVERVIEW AND PERFORMANCE

A.1 Business and external environment
     Main business lines and jurisdictions where
                                                       PUBLIC DISCLOSURE
    these lines are written

                                                       SUPERVISORY REPORTING – information
     Main factors contributing to company‟s           which is very commercially sensitive (we would
    position in the past and future                    imagine that main factors having contributed to
                                                       the company‟s position in the past would also be
                                                       publicly disclosed in the annual reports)
                                                       -    Detailed information: SUPERVISORY
                                                            REPORTING
 Business model
                                                       -    High level information: PUBLIC
                                                            DISCLOSURE

 Legal and regulatory issues                          SUPERVISORY REPORTING
                                                       PUBLIC DISCLOSURE but this information would
 Market developments affecting the business
                                                       also form part of the ORSA

A.2 Objectives and strategies
                                                       -    Detailed information: SUPERVISORY
 Information on the financial and non-financial            REPORTING through the ORSA process
  objectives of the undertaking                        -    High level information: PUBLIC
                                                            DISCLOSURE
                                                       -    Detailed information: SUPERVISORY
 Explanation of the significant changes in the             REPORTING through the ORSA process
  undertaking‟s strategy                               -    High level information: PUBLIC
                                                            DISCLOSURE
A.3 Investment performance (qualitative)
                                                       -    Detailed information: SUPERVISORY
 Management discussion and analysis of                     REPORTING
  investment performance                               -    High level information: PUBLIC
                                                            DISCLOSURE
 Returns on investments
                                                       PUBLIC DISCLOSURE
 Gains and Losses recognized in equity                PUBLIC DISCLOSURE based upon reported
                                                       accounts
 Transactions with shareholders, profit-sharing
                                                       PUBLIC DISCLOSURE
 Investment expenses (past and future)
                                                       SUPERVISORY REPORTING
                                                       - High level key assumptions (e.g. hedging
 Key assumptions (interest and exchange rates)            strategy): PUBLIC DISCLOSURE
                                                       -   Detailed information: SUPERVISORY
                                                           REPORTING
A.3 Investment performance (quantitative)

 Income statement from investments activities
                                                       PUBLIC DISCLOSURE
 Changes in values, total interest income and
                                                       PUBLIC DISCLOSURE
  expense

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 With-profits bonus payouts
                                                      PUBLIC DISCLOSURE

A.4 Performance from underwriting activities (qualitative)

General comment: Most of these requirements would not be relevant for Life firms.

 Management discussion and analysis of               - High level information: PUBLIC DISCLOSURE
  underwriting performance                            - Detailed information: SUPERVISORY
                                                          REPORTING
                                                      -   High level information: PUBLIC DISCLOSURE
 Deviations underwriting performance against
  plan                                                -   Detailed information: SUPERVISORY
                                                          REPORTING
 Projections underwriting performance over
  business planning period                            SUPERVISORY REPORTING

 Underwriting expenses prior and future years
                                                      SUPERVISORY REPORTING


A.4 Performance from underwriting activities (quantitative)
For Non-Life Undertakings

 Premiums, claims and underwriting expenses
  by LoB gross and net                                PUBLIC DISCLOSURE

 Details reinsurance programs
                                                      SUPERVISORY REPORTING
 Multi-year contracts, information on part
  premium provisions relating to policies more
                                                      SUPERVISORY REPORTING
  than one year old

 Current incurred claims split between existing
  and new contracts                                   PUBLIC DISCLOSURE

 Claims incurred split between current year
  claims and movements on prior year claims           PUBLIC DISCLOSURE


A.4 Performance from underwriting activities (quantitative)
For Life Undertakings

 Annual Premium Equivalent split between
  single and regular premium                          PUBLIC DISCLOSURE

 Analysis of surplus comparing experience with
  prior expectations                                  SUPERVISORY REPORTING


A.5 Operating / Other expenses (qualitative)

                                                      - High level past data: PUBLIC DISCLOSURE
 Expenses split by material expense type and/or
                                                      - Detailed information: SUPERVISORY
  function
                                                        REPORTING
 Comparison of expense levels compared to            - High level past data: PUBLIC DISCLOSURE
  prior and future years                              - Detailed information: SUPERVISORY


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                                                           REPORTING

A.5 Operating / Other expenses (quantitative)

                                                       - High level past data: PUBLIC DISCLOSURE
 Amount of expenses incurred by material
                                                       - Detailed information: SUPERVISORY
  type/line of business
                                                         REPORTING

      B. QUANTITATIVE REQUIREMENTS


B.1 Assets, technical provisions and other liabilities (quantitative)

 B.1.1 Assets (including investments) (qualitative)


 Basis, methods, assumptions for valuation of
  assets                                              PUBLIC DISCLOSURE

 Description how assets match liabilities through
  ALM (nature expected claims, discretionary
  elements, embedded options and                      SUPERVISORY REPORTING
  guarantees…)

                                                      PUBLIC DISCLOSURE with the exception of
                                                      Point g) (overview of investment concentrations
 Overview of derivative instruments, assets not
                                                      by asset type, counterparty, geography etc.)
  traded on a financial market and investment
                                                      would seem excessive detail for public disclosure
  concentrations
                                                      and could cause undue market panic (e.g. in
                                                      current market conditions)

 B.1.1 Assets (including investments) (quantitative)

 Amount of different categories of assets,            - High level information: PUBLIC DISCLOSURE
  exposures to counterparties and types of             - Detailed information: SUPERVISORY
  counterparties                                         REPORTING

                                                       - High level information: PUBLIC DISCLOSURE
 Mark-to-market changes in asset values
                                                       - Detailed information: SUPERVISORY
                                                         REPORTING
 Reconciliation between solvency and                  - High level information: PUBLIC DISCLOSURE
  accounting valuation                                 - Detailed information: SUPERVISORY
                                                         REPORTING
 B.1.2 Technical provisions (qualitative)

 Key assumptions and methodologies in
  calculation of TP                                   For market discipline and to ensure the
                                                      comparability between insurers, it might be useful
      Discount rates, expenses, future margins,      to publicly disclose some of these key
       mortality and disability rates                 assumptions (for further information, please refer
                                                      to the CRO Forum paper on Market Value of
      Taxation assumptions, participation            Liabilities for Insurance Firms – 28 July 2008)
       features, options and guarantees
                                                      It is not clear how the effect of management
      Management actions, policyholder               actions and policyholder behaviour should be

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      behaviour, inflation rates                        disclosed e.g. management actions relative to
                                                        which comparator.
     Mismatching provisions, claims
      development patterns

 Simplifications used in calculation TP and risk
  margin                                                SUPERVISORY REPORTING

 Level uncertainty TP, potential variability
  amount TP                                             SUPERVISORY REPORTING

 Overview material changes TP (changes key
  assumptions, changes claim development
                                                        SUPERVISORY REPORTING
  patterns, new material claims, material changes
  lapse rates…)
 Impact of reinsurance in TP
                                                        SUPERVISORY REPORTING

 Reconciliation between solvency and
                                                        SUPERVISORY REPORTING but possible
  accounting valuation
                                                        evolution towards PUBLIC DISCLOSURE

 B.1.2 Technical provisions (quantitative)

 Solvency balance sheet information on:

     Amount Technical Provisions (separating
      Best Estimate and Risk Margin)

     Segmentation Technical Provisions by
      homogeneous risk, LoB and Category

     Amount Technical Provisions Gross and
      Net Reinsurance
                                                        All information detailed above can be publicly
     Quantitative changes in Technical                 disclosed at a high level with the exception of
      Provisions                                        “Triangulations for material LoB and Run off
                                                        triangles for annuity reserving”
     Reconciliation material differences solvency
      and accounting

     Triangulations for material LoB

     Run off triangles for annuity reserving

     Effect management actions and
      policyholder behaviour

     Valuation principles of technical provisions

 B.1.3 Other Liabilities (qualitative)

 Information on the basis and assumptions upon
                                                        SUPERVISORY REPORTING
  which other liabilities are valued
 Explanation on the fact that the undertaking has
                                                        SUPERVISORY REPORTING
  dealt with any debt vs. equity issues
 B.1.3 Other Liabilities (quantitative)

 Balance sheet information detailing the nature        PUBLIC DISCLOSURE

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  and value of other liabilities (non-insurance)
 Reconciliation of material differences in the
                                                        SUPERVISORY REPORTING but possible
  solvency valuation basis of their liabilities to
                                                        evolution towards PUBLIC DISCLOSURE
  their accounting basis
 Details of off balance sheet items such as
                                                        PUBLIC DISCLOSURE
  exposures to SPVs


B.2 Solvency capital management

General comment: The SCR being the normal target level of capital for a firm and therefore
being a “softer” regulatory target than the MCR, detailed information on the SCR should
remain private information between the regulator and the firm.
 B.2.1 Own funds (qualitative)


 Methods to manage its own funds
                                                        SUPERVISORY REPORTING
 Own funds structure and summary information
  on the loss-absorption capacity of each item          SUPERVISORY REPORTING

 Analysis significant movements own funds over
  the period (especially in a deteriorating
                                                        SUPERVISORY REPORTING
  solvency position)

 Material differences between accounting and
  solvency                                              SUPERVISORY REPORTING

 Amount own funds covering MCR and SCR
                                                        SUPERVISORY REPORTING

 Own funds transferability within the undertaking
                                                        SUPERVISORY REPORTING

       B.2.1 Own funds (quantitative)

 Level of own funds split by tiers (quarterly when
  backing MCR)                                          SUPERVISORY REPORTING

 Reconciliation of material differences between
  regulatory eligible own funds and own funds
                                                        SUPERVISORY REPORTING
  reported in financial statements

 Own funds projection forecast
                                                        SUPERVISORY REPORTING

       B.2.2 Regulatory capital requirements (qualitative)
 Results calculation MCR and SCR using
  standard formula or internal model
                                                        SUPERVISORY REPORTING


 Non-compliance with MCR and SCR during
  reporting period                                      SUPERVISORY REPORTING

 If using entity-specific parameters, these should
  be provided along with a justification                SUPERVISORY REPORTING

 Capital add-ons applied to SCR                        SUPERVISORY REPORTING

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       B.2.2 Regulatory capital requirements (quantitative)
 Comparison of TP, MCR and SCR to own funds
                                                       SUPERVISORY REPORTING

B.2.3 Standard formula vs. internal model (qualitative)
 Reconciliation by risk module explaining
  qualitative material differences in assumptions      SUPERVISORY REPORTING

 Justification of differing key assumptions from
                                                       SUPERVISORY REPORTING
  the standard formula
B.2.3 Standard formula vs. internal model (quantitative)
                                                       SUPERVISORY REPORTING as disclosure
 Comparison by risk module between the results        could be highly misleading where, as is most
  of the standard formula and internal model           likely for firms using an internal model, the
                                                       internal model does not follow the exact structure
                                                       of the standard formula

    C. SYSTEM OF GOVERNANCE

General comment: We would imagine most of this section to be reported to
supervisors through the ORSA process and therefore kept private between the
supervisor and the firm as public disclosure in these aspects could erode competitive
advantage.


C.1 General Governance requirements

 Material changes in the governance structure         SUPERVISORY REPORTING

 Assessment adequacy system of governance to
                                                       PUBLIC DISCLOSURE
  undertaking‟s risk profile

 Structure administrative and management body         PUBLIC DISCLOSURE

 For groups, description of the corporate
  structure                                            PUBLIC DISCLOSURE


 Description responsibilities relevant committees     SUPERVISORY REPORTING



C.2 Fit and proper
 Description process to ensure that persons
  running the undertaking are fit and proper           SUPERVISORY REPORTING

 Changes in persons running key functions
  should be notified                                   SUPERVISORY REPORTING

 Description process to employ skilled staff
                                                       SUPERVISORY REPORTING

C.3 Outsourcing

 Evidence safeguards are in place                     SUPERVISORY REPORTING


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                                                                               October 2008




 Outsourcing arrangements as part of continuity
  plans                                              SUPERVISORY REPORTING

 Details service provider
                                                     SUPERVISORY REPORTING
 How outsourcing has not affected the quality of
  system of governance                               SUPERVISORY REPORTING

 Assessment impact operational risk through
  ORSA                                               SUPERVISORY REPORTING

 Level of policyholder protection
                                                     SUPERVISORY REPORTING

C.4 Internal Audit

 Description operative internal audit function
                                                     PUBLIC DISCLOSURE
 How Independence internal audit function is
  achieved                                           PUBLIC DISCLOSURE

 Examination compliance undertaking‟s activities
                                                     SUPERVISORY REPORTING but this should
  with internal strategies
                                                     only be reported by exception
 Actions to improve the control framework
                                                     PUBLIC DISCLOSURE of overview
 Summary of audits performed and future audits
                                                     SUPERVISORY REPORTING
 Key risk exposures and management response
                                                     SUPERVISORY REPORTING
 Overview findings reported to management
  body                                               SUPERVISORY REPORTING


C.5 Actuarial function

 Details personnel (experience and expertise)
                                                     SUPERVISORY REPORTING
 Areas of responsibility and areas of work
                                                     SUPERVISORY REPORTING

 Information about coordination calculation TP
  (and internal opinions provided management         SUPERVISORY REPORTING
  body)
 How actuarial function is independent from
  finance function                                   SUPERVISORY REPORTING

 Underwriting policy and reinsurance
  arrangements                                       SUPERVISORY REPORTING

 Risk management system
                                                     SUPERVISORY REPORTING


C.6 Internal controls

 Administrative and accounting procedures           SUPERVISORY REPORTING

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 Internal control framework

     Delegation of responsibilities

     Reporting lines and segregation of duties
                                                        SUPERVISORY REPORTING
     Reporting arrangements to provide
      management body with information



C.7 Risk Management (qualitative)

 Scope and nature of risk and capital
  measurement systems including measurement
                                                        SUPERVISORY REPORTING
  tools

 Scope, frequency and requirements of
  management information                                SUPERVISORY REPORTING

 Structure and organization of key functions
                                                        SUPERVISORY REPORTING
 Integration internal model into risk management
                                                        SUPERVISORY REPORTING
  strategy
 Qualitative measures to monitor non-
  quantifiable risks                                    SUPERVISORY REPORTING

 Analysis of liquidity risk: potential effects of      SUPERVISORY REPORTING
  liquidating assets in stressing situations

C.7 Risk Management (qualitative)

 C.7.1 Material risk exposures

 Nature of material risk exposures (past
  development and expected changes over next
  few years)                                            SUPERVISORY REPORTING


 Description most risky products and
  investments                                           SUPERVISORY REPORTING


 Risk appetite in relation to business objectives

     Level of risk taking into account company‟s
      financial strength and nature, scale and
      complexity of risks                               SUPERVISORY REPORTING

     Management asset-liability matching
      (including sensitivity tests)




 C.7.2 Material risk concentrations

 Description types of risk concentration and
                                                        SUPERVISORY REPORTING
  details of concentration exposures

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                                                                                   October 2008




 C.7.3 Risk mitigation

 Strategies and methodologies for mitigating risk   SUPERVISORY REPORTING

 Use of reinsurance and other forms of risk
  transfer                                           SUPERVISORY REPORTING


 Reinsurance policy and Adequacy of
                                                     SUPERVISORY REPORTING
  undertaking‟s reinsurance cover


 C.7.4 Individual risk information

                                                     - High level information: PUBLIC DISCLOSURE
 Underwriting risk
                                                     - Additional confidential information:
                                                         SUPERVISORY REPORTING
                                                     - High level information: PUBLIC DISCLOSURE
 Market risk
                                                     - Additional confidential information:
                                                         SUPERVISORY REPORTING
                                                     -   High level information: PUBLIC DISCLOSURE
 Credit risk
                                                     -   Additional confidential information:
                                                         SUPERVISORY REPORTING
                                                     -   High level information: PUBLIC DISCLOSURE
 Liquidity risk
                                                     -   Additional confidential information:
                                                         SUPERVISORY REPORTING
                                                     -   High level information: PUBLIC DISCLOSURE
 Operational risk
                                                     -   Additional confidential information:
                                                         SUPERVISORY REPORTING
                                                     -   High level information: PUBLIC DISCLOSURE
 Risk sensitivities
                                                     -   Additional confidential information:
                                                         SUPERVISORY REPORTING
 ORSA
                                                     SUPERVISORY REPORTING




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