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

Annex C (Call for Advice No. 15)
Solvency control level: results of <strong>the</strong> survey on
failures and near misses
Introduction
The survey on actual failures and near misses was performed by <strong>the</strong> CEIOPS in
spring 2005. Of CEIOPS’ members, 17 participated in <strong>the</strong> survey. The aim of <strong>the</strong>
survey was <strong>to</strong> develop conclusions for determining solvency control levels and <strong>to</strong>
draw up advice based on <strong>the</strong> results of <strong>the</strong> survey. Considering <strong>the</strong> limited time
for responding <strong>to</strong> <strong>the</strong> CfA, CEIOPS considers this a very successful outcome. In
view of <strong>the</strong> result of <strong>the</strong> Sharma Report, <strong>the</strong> survey focused on <strong>the</strong> period
between 2001 and 2004. CEIOPS also wished <strong>to</strong> include a survey on near
misses; <strong>the</strong>se were defined as companies which were still solvent but had
problems which could have led <strong>to</strong> failures. As table 1 shows, between 2001 and
2004, 31 non-life insurers, 14 life insurers and 3 composite insurers suffered
actual failure. The number of near misses was substantially higher than that of
failures, with 56 for non-life, 39 for life and 57 for composite insurers. However,
a large number of <strong>the</strong> composite insurers were ei<strong>the</strong>r life or non-life insurers, but
<strong>the</strong> Working Group did not have access <strong>to</strong> <strong>the</strong> relevant data.
Table 1: Number of failures and near misses between 2001 and 2004
Actual failures Near misses
Non-life Life Combi Non-life Life Combi
Total 31 14 3 56 39 57
260