01 May 2012

Risk.net: Dutch regulator to begin Solvency II test on insurers

The DNB is to run Solvency II tests in parallel with those it undertakes for Solvency I from May 1, 2012. The test will focus on Solvency II’s Pillar I quantitative requirements and the associated reporting requirements under Pillar III, the regulator said.

All Dutch insurers falling within the scope of the Directive will be required to calculate their solvency positions for fiscal years 2011 and 2012. While the Netherlands’ largest insurers, such as Aegon and Delta Lloyd, are expected to pass the test with ease, experts expressed concerns about the country’s smaller insurers.

Unlike previous quantitative impact studies (QIS) run by the European Insurance and Occupational Pensions Authority, the DNB will not provide separate support software for the test run, and insurers will therefore be independently responsible for the accuracy of their calculations.

The test would provide useful assistance to smaller insurers in developing their regulatory reporting capability. Much of the focus to date has been on the quantitative aspects of Pillar I and the wider impact on asset liability management, he says.

In December, the DNB urged Dutch insurers to begin reporting on a Solvency II basis in 2012 although, at the time, it stressed that the move was not compulsory.

Meanwhile, other national regulators and insurance associations are also introducing their own tests to gauge the preparedness of the local insurers. German insurance industry trade body, the German Insurance Association, is set to conduct a Solvency II impact study this year.

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