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

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II project, it would seem preferable <strong>to</strong> adopt an alternative approach and entirely recast <strong>the</strong> current IGD. This would appear <strong>to</strong> be a more efficient approach, as well as help in ensuring consistency. 18.107 Moreover, <strong>to</strong> have a global view of <strong>the</strong> interdependencies between group and solo supervision and in order <strong>to</strong> facilitate <strong>the</strong> implementation of <strong>the</strong> Lamfalussy procedure, <strong>the</strong> Solvency II project would seems <strong>to</strong> be a good opportunity <strong>to</strong> consider <strong>the</strong> opportunity of having a single directive for <strong>the</strong> insurance sec<strong>to</strong>r (including both solo/group level). 224
Annexes Annex A (Call for Advice No. 16) Role of <strong>the</strong> actuarial function 147 A.1 The application of appropriate expertise is a key component in <strong>the</strong> management of insurance undertakings, both in life and non-life insurance. The evolution <strong>to</strong>wards a risk oriented approach and a risk sensitive capital requirement gives <strong>the</strong> actuarial function within <strong>the</strong> company more relevance and responsibilities. Given this, insurers should be required <strong>to</strong> have actuarial expertises, disregarding whe<strong>the</strong>r <strong>the</strong> model in use is 'responsible actuary', advisory actuary model or any o<strong>the</strong>r model. A.2 In a responsible actuary approach it is expected that <strong>the</strong> actuarial function is exercised by a person acting as a front-line controller of prudential financial management. Never<strong>the</strong>less <strong>the</strong> existence of responsible actuary does not diminish <strong>the</strong> responsibility of <strong>the</strong> Board of Direc<strong>to</strong>rs. A.3 The actuary’s responsibility in an advisory actuary model would be <strong>to</strong> give a professional opinion based on his skills, his experience and, if applicable, his compliance with <strong>the</strong> Code of Conduct of his association. It is clear that <strong>the</strong> responsibility for decisions always rests with <strong>the</strong> Board of Direc<strong>to</strong>rs. Fit and proper issues A.4 The appointment of a responsible actuary should be subject <strong>to</strong> supervisory review and <strong>the</strong> supervisor should have <strong>the</strong> powers <strong>to</strong> have an unsatisfac<strong>to</strong>ry appointee removed from <strong>the</strong> position. A.5 The term actuary should not be limited <strong>to</strong> members of an actuarial society. The term actuary should cover all persons who are knowledgeable and have relevant experience. Criteria for an actuary may include: • Qualified by specified initial and ongoing educational requirements; • Membership in <strong>the</strong> local professional body at an appropriate level; 147 When using <strong>the</strong> word "actuarial" in <strong>the</strong> draft answers and annexes it is not CEIOPS’ intention <strong>to</strong> specify <strong>the</strong> use of professional actuaries. The concept is used <strong>to</strong> describe a specific function applying statisticalma<strong>the</strong>matical methods developed for <strong>the</strong> use in insurance undertakings. 225
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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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particular reinsurer(s)’ aggregat
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they auto<
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einsurer to <stron
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should be a reduction in risk regar
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Call for Advice No. 13 Quantitative
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• the process of
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• handling questions from insuran
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member countries and in the
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components of the
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Background 14.1 Current insurance D
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14.12 In order to
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groups in its answer to</st
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affected; • Impose restrictions o
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14.43 Regarding the</strong
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off all contracts; • to</
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Call for Advice No. 15 Solvency con
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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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