Review of Solvency II Reporting and Disclosure Requirements: Reporting Cost Survey

Background

On Monday 19 October 2020, HM Treasury published its Call for Evidence inviting feedback on how the insurance reporting and disclosure requirements among other areas of Solvency II could be improved to better reflect the UK insurance sector. As part of the next phase of the review we aim to gain an understanding of the historical costs and cost drivers associated with Solvency II reporting and disclosure requirements. This will inform the second set of reforms proposals, which we intend to consult on later in 2022.

What is the Reporting Cost Survey?

Under FSMA section 138J, we have a statutory duty to publish a cost benefit analysis to accompany the draft policy proposals, unless we consider that the costs or benefits cannot be reasonably estimated or practicable to produce.

On Tuesday 19 April 2022, we launched the Solvency II reporting cost survey with the aim of gathering historical operational cost information from firms on their compliance with the existing framework, to assist with our analysis of the costs and benefits associated with future reporting and disclosure policy proposals.

The reporting cost survey will collect information on the historical costs and operational processes associated with reporting, including the one-off implementation costs of historical changes, as well as the ongoing costs and processes within firms to comply with Solvency II reporting and disclosure requirements.

The data collected will allow us to analyse and understand the cost drivers in firms arising from both firms’ own reporting processes as well as the design of the current Solvency II reporting framework.

What do I need to know?

Firms are asked to respond by Friday 27 May 2022. Submissions should be completed and returned to us through the BEEDS portal. Participation in the survey is on a voluntary basis but we highly recommend UK insurance firms from all sectors to participate, given the importance of Solvency II reform.

Completion should be on a best effort basis, however, it is important we receive high quality data, and therefore we ask that an appropriate level of review is undertaken by firms.

All information will be confidential. Where appropriate, we may refer back to you if we need further clarity or understanding about the information provided to ensure that our cost analysis is as accurate as possible.

We encourage all firms to complete the survey to enhance our evidence base on the cost of this and any future reforms.

Please address any comments or enquiries by emails to: reportingcostsurvey@bankofengland.co.uk

• Solvency II Phase 2 Reporting Cost Survey

About the event

Date and time: 23 March 2022, 10 - 11.30am
Location: Virtual (on Microsoft Teams)

In this roundtable event, we intend to discuss key aspects of our approach to collecting data for a wide range of firms, on the cost of compliance with Solvency II reporting and disclosure requirements. This event will in turn inform a future survey of Solvency II insurers on reporting and disclosure costs.

We would like to discuss:

• Availability and granularity of operational cost information that firms hold, including implementation and ongoing costs of Solvency II reporting and disclosure; 
• What operational process(es) associated with existing reporting and disclosure requirements are most costly; 
• Which aspects of the current reporting requirements differ from firms’ own internal MI on similar topics;
• The internal benefits to firms of preparing Solvency II reporting and disclosure data; and
• The make-up of, and how best to estimate the costs of potential changes to the reporting and disclosure requirements.

If you are interested in attending the Reporting Cost Survey Roundtable, please contact your relevant supervisor, alongside InsuranceData@bankofengland.co.uk. Dial-in details will be sent prior to the event.