July 2015 - 155 days to Solvency II

155 days to Solvency II

Asset managers and insurers still have work to do to meet the deadline

By 1 January 2016, insurers will need to be ready for reporting and disclosure related to “Pillar 3” of Solvency II, which obliges them to reveal to regulators details of the funds in which they invest.

The asset managers of these funds will need to disclose detailed information to the insurers (the look through principle). They, and insurers, must have systems and processes in place for collecting and transmitting this data.

Moreover, in September this year, many countries and insurers will be carrying out dry run testing to prepare for the January deadline.

Between now and January there is therefore much to do.

Asset manager challenges for reporting

During July, Silverfinch, the Fundsquare partner for Solvency II solutions, hosted a forum on the issues created by requests for look-through data.

The first and most basic challenge for the asset manager is the vast amount and wide scope of data to be sent from managers to insurers. The look-through data required by insurers is often not held by one single function within the fund management company. Added to this is the simple fact that managers want data for their day-today business that is not the same data that is needed by the insurer. It is difficult for managers to get all this data together.

In addition, there remain issues related to intellectual property because of the disclosure of a fund’s holdings to the insurance company. It is unclear whether a licensing contract or a service level agreement is the best way to solve this.

Finally, asset managers will require a secure channel to transmit the data to the insurers and to ensure that they retain control of who has access to their funds’ data.
For asset managers, resolving these issues is critical if they want to keep existing relationships with insurers and to position themselves to win new insurer mandates.

EIOPA finalises reporting package

Also in July, the European Insurance and Occupational Pensions Authority (EIOPA) submitted its implementing technical standards to the European Commission.

These include important standards and requirements for Pillar 3 reporting and disclosure. They provide clarification that will better enable insurers to respond to the requirements.

They also include the final set of the quantitative reporting templates, or QRTs, which, in some cases, have been simplified.

The European Commission has four months to give their formal endorsement on these standards.

The Fundsquare and Silverfinch solution

In order to assist managers to respond effectively and efficiently to look-through requests, Fundsquare and Silverfinch, provide a solution that enables asset managers to have a secure response to requests for look-through portfolio data.

A number of asset managers are already signed up for this joint solution and for more information, visit www.silverfinch.com or contact Paolo Brignardello of Fundsquare (+352 28 370 528, [email protected]) or John Dowdall of Silverfinch (+353 1 671 6911, [email protected]).

_{Published on: 30 July 2015}

Fundsquare News 22 - July 2015