130516 Solvency II for Beginners.pdf

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The Solvency II Balance Sheet• Own Funds (Eligible Capital)– Tier One: Basic own funds, if all the boxes are ticked– Tier Two: Basic own funds, even if permanent availability isnot met, or Ancillary Own Funds, if all the criteria are met– Tier Three: Anything else• Quantitative limits apply to the extent to which Tier Two andThree items can be recognised to meet SCR / MCR• Tier One must constitute more than one third of Eligible Capital,Tier Three must be less than one third
The Solvency II Balance Sheet• Assets– The “Prudent Person Principle” applies:• Must be able to identify, measure, monitor, manage, controland report the risks involved in the investments• Must ensure the security, quality, liquidity and profitability ofthe portfolio as a whole• Must be appropriate to the nature and duration of the liabilities• Derivatives allowed if they reduce risks or facilitate efficientportfolio management• Assets should be properly diversified– No prescribed quantitative limits– No localisation requirements– No compulsory collateral for reinsurance
Page 1 and 2: Solvency II for Beginners16.05.2013
Page 3 and 4: Why has Solvency II been created?
Page 5 and 6: Solvency II Structure• Conceptual
Page 7 and 8: The Solvency II Balance SheetAssets
Page 9 and 10: The Solvency II Balance Sheet• So
Page 11 and 12: The Solvency II Balance Sheet• So
Page 13: The Solvency II Balance Sheet• Ow
Page 17 and 18: Pillar II Aspects• Own Risk and S
Page 19 and 20: Pillar III Aspects• Report on sol
Page 21: Where Are We Now?• Level 1: Solve
Page 24: Solvency II for BeginnersQ&A

130516 Solvency II for Beginners.pdf

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