Solvency II  

Solvency II reporting rules daunting for small firms

Solvency II reporting rules daunting for small firms

Solvency II reporting requirements are heavily complicated, particularly for smaller firms, James Bedingfield has said.

The senior investment director for Investec Wealth & Investment, said there were "complexities" faced by financial mutuals when it came to "complying with the myriad requirements of Solvency II".

He said Solvency II was "primarily designed for much larger insurance firms".

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Mr Bedingfield's comments came as Investec Wealth & Investment launched fully-automated Solvency II reporting solution for financial mutual and insurance companies.

The solution enables clients to have a comprehensive investment proposition, which will use the firm's 'best of breed' investment philosophy of combining direct equities, corporate bonds, gilts, collectives and alternative assets to achieve the optimum investment solution for clients.

Mr Bedingfield said the firm had developed the reporting solution in direct response to market demand for cost-effective tools to meet the additional reporting, risk and governance challenges set by Solvency II.

The reporting solution was designed in partnership with input from existing clients and industry actuaries.

The Solvency II regulatory regime came into force in the EU in January 2016 and is designed to achieve a consistent basis for the measurement of capital in insurers across Europe.

However, the regulations have created significant challenges for financial mutuals and insurance companies as it affects their risk and governance, and the frequency and amount of information they are required to report to regulators.

In 2016, the Treasury Select Committee launched an inquiry into the effects of Solvency II on the UK’s insurance industry, in light of concerns raised by industry insiders.

While he was chief executive of the Prudential Regulation Authority, Andrew Bailey, who is now chief executive of the Financial Conduct Authority, said the history of the EU process on the directive was “shocking” and the implications for costs for insurers and regulators were “staggering”.

Mr Bedingfield added: "Given the fact that we already worked with a number of leading financial mutuals for over 20 years, we have an intimate understanding of how to apply Solvency II regulations to their reporting requirements.

"We look forward to further expanding our relationships in this sector."