EFAMA KPMG Solvency II Report

4.1.4 Ad-hoc Data Provision
Requirements
Former Solvency II Consultation Paper 56 states that
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“ …in abnormal circumstances, especially in a crisis, it might be
essential for both the undertaking and supervisory authorities
that updates of data used in the calculation of the probability
distribution forecast be performed at shorter notice and more
frequently by the undertaking.
Undertakings may benefit from identifying events which they
consider to be severe enough to warrant their performing
non-regular, unscheduled data updates.
Furthermore, undertakings should define circumstances under
which they regard a prompt recalculation of economic capital and
(parts) of the Solvency Capital Requirement (SCR) as necessary.”
These data updates at the insurer would require additional unscheduled data from the
invested asset manager or third party administrator.
Challenges and Impacts
The responsibility for defining the events and the required data set for an unscheduled
data update lies with each insurer and, as a result, is not standardised across the
industry.The turnaround time currently requested by insurers for the provision of this
data varies between 48 hours and one week.
Any model data, internal or external, must also meet the data quality requirements
set out in the Solvency II Directive so data required for unscheduled updates must be
subject to the same degree of data governance as all other Solvency II data.
As the data set and trigger events remain non-standardised and, in many cases,
undefined, the invested asset managers and third party administrators may be unable
to agree contractual and legal obligations with the insurer to provide ad-hoc data.
The IT systems and business processes in place at the asset managers and third party
administrators are not designed to accommodate this level of ad-hoc data refresh
and reporting. The changes required to comply with this requirement may incur
considerable cost, time and effort.
The usually limited turnaround time and unscheduled nature of these data requests
will also limit the level of data quality testing that the asset managers and third party
administrators can apply to the ad-hoc data. For example, quality checks such as
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