Solvency II Compliance

Compliance with the requirements of the Solvency II directive – leading the way for insurers!

The year 2012 is fast approaching and the greatest challenge for all European Union insurers is compliance with Solvency II. This CEIOPS directive introduces a comprehensive risk management framework for defining required capital levels and for implementing procedures to identify, measure, and manage risk levels efficiently.

Always ahead of the game, SPIRIT has partnered with Business Process Excellence Consulting Software AG and SecondFloor to offer a concrete solution that meets the requirements of all three pillars of the Solvency II directive: a perfect mix of specialized software, industry-expertise and consulting skills that makes the insurer’s response to Solvency II not a mere compliance exercise but an opportunity to generate further value for the company.

Pillar I (Quantitative Requirements)

To meet the quantitative requirements of Pillar I, our solution combines SecondFloor’s in-house software and industry knowledge with our consulting expertise.

  • eFrame: a web based solution for spreadsheets control in management reporting activities. The solution allows financial institutions to run their spreadsheets in a secured and controlled environment, while increasing (through reporting cycles) the reliability of the input and output data to support analysis and strategic decision. With a wide range of integration capabilities, eFrame can fully integrate with CEIOPS standard model (QIS 5) and 3rd party internal model implementations, making it the ideal solution for Solvency II. This integration supports any calculation on business unit and/or group level to comply with Solvency II requirements. eFrame comes with auditors’ guarantee to ensure that this product is auditor approved.The key benefit of eFrame is that it can be implemented within the existing risk-management environment, which greatly reduces complexity, costs and of course provides a controlled way forward in the Solvency II implementation.
  • IISolve: a Solvency II component library that comes with a comprehensive set of software components ready to be tailored as a customer specific Solvency II risk portal.

Pillar II (Supervisor Review)

Building upon SPIRIT’s consulting expertise in process analysis and design, we leverage our Regulatory Compliance offering by developing:

  • a process-driven implementation of an Enterprise Risk Management Framework, namely the internationally established COSO II framework
  • a sustainable Compliance Management system

Both of these are using the ARIS Analysis and Design platform as well as the ARIS GRC Solution from Software AG / IDS Scheer.

Pillar III (Disclose and Transparency)

This directive introduces a level of transparency with regards not only to the supervisors, but also the market, the shareholders, the policy holders, the rating agencies and the regulators.

  • We offer the flexibility of integrating this new “transparency requirement” into the overall performance reporting established within your company, not only to greatly increase the value of produced reports, but in addition to eliminate all unnecessary costs involved in deploying a new reporting mechanism.

Benefits of our Solvency II solution

With our solution the insurer’s response to Solvency II goes beyond legal compliance to higher levels of profitability and operational excellence:

Flexibility for Greater Efficiency

Instead of introducing and implementing internal control systems (and the respective compliance processes that build upon them) on a project basis each time a law or regulation comes along, we manage to reduce complexity and achieve greater efficiency by implementing a central platform to support an internal control system (ERM COSO II) where business processes form the common basis for all controls needed to comply with the various laws and regulations - in addition to Solvency II. Closer analysis of process control requirements and of the procedures for testing, auditing, and documenting the results, reveals a high degree of overlap between the various regulations. Efficiency can be increased significantly by applying a consistent method, harmonizing test activity and sharing test results.

Common Language

Comprehensive process documentation of a process-based approach to implementing an internal control system, provides a common language across all departments that embraces their different views: business view, IT view, process view and organization view.

Interoperability

The ARIS GRC Solution provides the best possible support for all workflows associated with an internal control system by covering processes for documenting, updating and communicating company rules, procedural instructions, and controls, risk analysis and evaluation processes, documentation of test activity, internal management assessment and testing processes, plus support for problem tracking and root cause analysis.

A Strategic Tool

A GRC Solution should support the six key optimization strategies: right-sizing (reducing the number of controls and implementing them evenly at the corporate, IT and process level), integrating risk management and compliance management, providing support for self-assessment, standardization of processes and centralization of controls, repositioning and automating controls and introducing an internal control maturity model. The ARIS GRC Solution supports these process-based methods (all closely associated with process management), from strategic analysis and definition to designing controls and tests, implementation, monitoring the effectiveness of controls/actions by way of scalable, efficient workflows, enterprise-wide monitoring of process performance and efficiency, testing that allows a prompt response to deviations, and continuous optimization of the established system.