EIOPA's report aims to analyse enhancement of supervisory practices related to the assessment of internal models during the pre-application process under the Solvency II framework.
In Q1-Q3 2014 EIOPA concluded the follow-up to the two peer reviews on pre-application of Internal Models, which were completed in mid-20131. The follow-up exercise aimed at analysing the progress made by National Competent Authorities (NCAs) and EIOPA with respect to the recommendations made as a result of the peer reviews.
The current assessment is based on information acquired through the above mentioned peer reviews, as well as through the NCAs’ progress reports submitted for this Follow-up exercise, in the beginning of 2014.
The analysis has applied the principle of proportionality with respect to the implementation of the recommendations and best practices. Such proportionality approach implies higher expectations towards NCAs with more experience in pre-application processes (e.g. number of processes initiated by national groups/undertakings as well as number of processes in which the NCA is involved).
With reference to the NCA specific recommendations this follow-up to the peer reviews has established that the vast majority of the NCA specific recommendations have been already followed-up and those remaining are planned to be implemented by 2015 in order to better structure processes, tools, resources used in pre-application/application of internal models, keeping in mind the respective circumstances at national level.
With respect to the general recommendations, on the basis of the adopted proportionality approach, the focus was put more strongly on NCAs that have more experience with pre-application processes.
Regarding the best practices identified in the initial peer review, the NCAs with more pre-application processes in place have undertaken major actions, taking into account the proportionality principle (based on respective organisation, capabilities and resources available) to improve their processes and knowledge.
Full progress report
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