Solvency II legislation comes into effect on 1st January 2016 and any European Union (EU) firms in the financial services sector affected by the new capital adequacy regime will have to submit their first data sets in the first quarter of next year.
It is imperative that firms ensure their computation process is correct and are prepared for any adverse effects, says Robert Gothan, chief executive (CEO) and founder of business process management firm Accountagility, who has been working with firms ahead of the January deadline.
“With the Bank of England approving many Solvency II models this month, it is clear that some insurers are well prepared ahead of the 1st January deadline,” says Gothan. “What remains to be seen, however, are the teething problems that these models will experience once they are incorporated into company procedures.
“Solvency II is changing the way that insurers need to submit their data, so it is crucial that firms are prepared for any adverse effects by ensuring that the computation is right ahead of time. At the same time, firms also need to understand that this will not be a one-off process, but instead require constant reviewing and regulation of the model in order to ensure that Solvency II remains smooth into 2016 and beyond.
“Despite the headaches that some companies have experienced in the preparation process, insurance has recently been one of the stronger financial markets, so firms should see Solvency II as a positive opportunity to flourish and modernise.”
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