Answers to the European Commission on the ... - Eiopa - Europa

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undertaking (including <strong>the</strong>ir achievement); • <strong>the</strong> shareholder should have integrity and reliability ('proper test'); and • <strong>the</strong> group structure should be transparent <strong>to</strong> allow appropriate supervision according <strong>to</strong> Article 6 (2) of <strong>the</strong> Recast Life Directive. CEIOPS discussions would suggest that Article 15 of <strong>the</strong> Recast Life Directive has not been used in an inappropriate way so as <strong>to</strong> act as an unjustified obstacle <strong>to</strong> cross-border mergers and acquisitions. CEIOPS does <strong>the</strong>refore not believe that problems have arisen from <strong>the</strong> current wording or transposition of Article 15, but believes that CEIOPS’ proposals <strong>to</strong> harmonise <strong>the</strong> assessment of fitness and propriety will assist in addressing any possible perceptions that Article 15 can be abused. 16.46 Additional criteria <strong>to</strong> consider when assessing suitability: • <strong>the</strong> target undertaking; i.e. <strong>the</strong> complexity of its business, its financial position, <strong>the</strong> size of <strong>the</strong> undertaking in relation <strong>to</strong> <strong>the</strong> acquirer’s financial strength; and • <strong>the</strong> possible emergence of conflicts of interest in an undertaking arising from possible competing interests between acquirers of qualifying holdings and <strong>the</strong> targeted undertaking. 16.47 CEIOPS believes that a more harmonised approach <strong>to</strong> 'fit and proper criteria' within <strong>the</strong> authorisation process would minimise <strong>the</strong> need for separate 'fit and proper' control within <strong>the</strong> assessment of 'sound and prudent management'. 16.48 If compliance with <strong>the</strong> fit and proper criteria is examined across <strong>the</strong> EU on <strong>the</strong> basis of common criteria, this may render a separate test of <strong>the</strong> fit and proper criteria as part of <strong>the</strong> assessment of sound and prudent management unnecessary. Never<strong>the</strong>less, an effective exchange of information between supervisors is required. The check could only be omitted if this exchange has been done. If <strong>the</strong> key functionaries under assessment are corporate institutions regulated in o<strong>the</strong>r Member States than <strong>the</strong> insurance undertaking, supervisors should seek confirmation from <strong>the</strong> relevant supervisor that <strong>the</strong> institution is of good standing in that Member State. 16.49 If an individual has been working outside <strong>the</strong> insurance sec<strong>to</strong>r but within ano<strong>the</strong>r regulated financial services sec<strong>to</strong>r in ano<strong>the</strong>r Member State, it may also be necessary <strong>to</strong> exchange information with <strong>the</strong> supervisor in that o<strong>the</strong>r sec<strong>to</strong>r ei<strong>the</strong>r directly or via <strong>the</strong> insurance supervisor for that Member State. 16.50 CEIOPS is of <strong>the</strong> opinion that it is desirable that <strong>the</strong> same set of sound and prudent management and fit and proper criteria are applied in different financial sec<strong>to</strong>rs. The necessary specific technical knowledge 192
of <strong>the</strong> individual sec<strong>to</strong>rs must, however, be taken in<strong>to</strong> account. 16.51 CEIOPS believes that it is not necessary <strong>to</strong> change <strong>the</strong> threshold values in Article 15 of <strong>the</strong> Recast Life Directive nor does CEIOPS see any need for fur<strong>the</strong>r convergence. 193
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CEIOPS-DOC-07/05 Answers</s
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Style convention The following has
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• Safety measures (CfA 9); • So
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sole purpose is to
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Call for Advice No. 7 Technical pro
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one year). Therefore, capital requi
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perhaps through an explicit additio
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Discounting 7.22 The present value
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exposed to risk fr
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insurance liabilities set by refere
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Profit sharing In practice, for uni
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future cash flows will have <strong
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Explanatory text S
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always have resources to</s
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developed. They would help
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8.28 A fourth option could be envis
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In principle, "the
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8.48 Three alternatives can be cons
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essential part of the</stro
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statistical estimate (with a level
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8.77 It may be argued that
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to use more sophis
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consequence on the
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8.105 In some cases, the</s
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This shall be reviewed, at least an
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ut the exposure <s
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Explanatory text M
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9.15 Solvency II could also employ
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9.28 The life formula yields itself
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underestimate them
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'Prudent person plus' approach 9.52
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Uniform or different rules for tech
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through a prescribed list. Lists ar
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addition a range of stresses so tha
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(including the Rei
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for review of the
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eligibility criteria, or principles
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should not lead to
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• the degree of
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9.156 The senior management shall r
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- going-concern aspects of business
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features. 81 TailVaR is an example
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10.17 The SCR should also reflect <
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10.26 The risk of asset liability m
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Naturally, the pra
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too few categories
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- Choice of volume measures 10.57 W
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Underwriting risk in non-life insur
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volatility of thei
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those insurers this possible increa
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10.103 A factor-ba
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10.112 Assessing whethe</st
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10.121 The SCR should deliver a lev
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whenever its effects on the
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scenario techniques to</str
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Operational risk just ratings infor
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Call for Advice No. 11 Solvency cap
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Costs and Benefits 11.6 It should b
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• Qualitative requirements for <s
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11.19 Risk management criteria set
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individual undertaking is exposed a
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• sensitivity analyses that have
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• visualizations of flows of prod
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Partial models and the</str
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11.58 There should be few descripti
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of the SCR estimat
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equirements to imp
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Call for Advice No. 12 Reinsurance
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Reflection in technical provisions
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• provide an estimate of an under
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Page 175 and 176: adjusted SCR. From a purely technic
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Page 195 and 196: Background 17.1 This document aims
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B.34 There are two approaches <stro
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Segmentation B.44 In general terms,
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technical technical technical techn
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B.61 The second alternative was cho
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Dutch supervisory authority for <st
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Market risk Equity risk this altern
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B.95 In a scenario-based approach,
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B.106 As an alternative one could t
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where: KTSA = the
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Results from the a
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Solvency ratio prior to</st
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Number of instances Risk group Deta
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Conclusion In general, the<
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where: TP gross = technical provisi
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premium risk, the
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“While proportional reinsurance t
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contribute with any additional info
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E.29 Another way <
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programmes on the
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