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2015 | OriginalPaper | Chapter

5. Own Risk and Solvency Assessment

Author : Meinrad Dreher

Published in: Treatises on Solvency II

Publisher: Springer Berlin Heidelberg

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Abstract

The own risk and solvency assessment under art. 45 of the Solvency II Directive forms the subject of this chapter. Initial attention is given to clarifying the role of ORSA in the insurance supervisory regime and the principles applicable to it. Then follows a discussion of the relationship of ORSA to the risk management function as well to the other key functions under the insurance supervisory regime. In conclusion, the chapter addresses, inter alia, the documentation, the public disclosure, and the supervisory powers involved in an ORSA procedure.

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previous chapter Solvency Requirements

next chapter Fitness of Members of Supervisory Board

Directive 2009/138/EC of the European Parliament and of the Council of 25 Nov. 2009, OJEU L 335, p. 1 ff., of 17 Dec. 2009, (the “Solvency II Framework Directive”).

Own Risk and Solvency Assessment (hereafter, ORSA).

The introduction of the new Solvency II regime is based on the “Lamfalussy process” and will occur in four stages: At Level 1, there is the Solvency II Framework Directive itself. At Level 2, this Directive is concretized in an implementing regulation. Then, through further concretization and clarification, measures at Level 3 are intended to produce convergent supervision of insurance undertakings regardless of member-state borders. Finally, at Level 4, there is the implementation in national law. In Germany this will be accomplished through the VAG [German Insurance Supervision Act]. Monitoring of insurance undertakings falls to the responsibility of authorities in each Member State and of the EIOPA. In detail on the legislative process for Solvency II, Wandt/Sehrbrock, “Solvency II – Rechtsrahmen und Rechtsetzung” [in English: Solvency II – Legal Framework and Legislation], in: Dreher/Wandt eds., “Solvency II in der Rechtsanwendung” [in English: Solvency II in the Application of Law], (2009), p. 1 ff.

See, however, the enabling provisions under art. 50, para. 2 of the Solvency II Framework Directive and art. 2, para. 7 of the Proposal for an Omnibus II Directive dated 19 Jan. 2011 (COM(2011) 8 final) for delegated acts “to ensure appropriate convergence of the assessment referred to in Article 45(1)(a)” of the Solvency II Framework Directive.

European Insurance and Occupational Pensions Authority (EIOPA).

EIOPA, Consultation Paper on the Proposal for Guidelines on Own Risk and Solvency Assessment 2011 (Hereafter: Consultation Paper).

According to no. 3.5 of the Consultation Paper, this is reserved for the Guidelines on the Supervisory Review Process, which have not yet been issued.

See no. 3.2 of the Consultation Paper.

In principle, the date of application for Directive 138/2009/EC (Solvency II Framework Directive) is supposed to be set at 1 Jan. 2013 according to the proposal for the Omnibus II Directive (COM(2011) 8 final) in art. 2, para. 72 and 74.

See sec. 28 of the Referentenentwurf der Bundesregierung für ein Zehntes Gesetz zur Änderung des Versicherungsaufsichtsgesetzes [in English: Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act] of August 2011 (hereafter: VAG-E).

Statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 288, see below, at 5.8.3.

Statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 288, see below, at 5.4.3.

See No. 11 CEIOPS, Issues Paper ORSA 2008 (IP ORSA). In more detail on the legal term of “principles-based supervision”: Wandt/Sehrbrock, ZVersWiss (2011), 193 (203) and published in ZVersWiss 2010 special edition: “Solvency II in der Rechtsanwendung” [in English: Solvency II in Legal Application]. See in summary on the risks and opportunities of a principles-orientation Boetius, in: Ellenbürger/Ott/Frey/Boetius, eds., Mindestanforderungen an das Risikomanagement (MaRisk VA) für Versicherungen [in English: Minimum Requirements for Risk Management for Insurance Supervision (MaRisk VA)], 2009 p. 19; on further advantages, as well as problems in implementation, see Schaaf, “Risikomanagement und Compliance in Versicherungsunternehmen – aufsichtsrechtliche Anforderungen und Organverantwortung” [in English: Risk Management and Compliance in Insurance Undertakings – Supervisory Requirements and Institutional Responsibility] (2010), p. 25 f.

See below, at 5.8.3 as well as No. 8 IP ORSA, Gödeke, VersR (2010), 10 (14) and the statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act] p. 286.

No. 9 IP ORSA.

Not entirely clear, art. 45, para. 1, subpara. 2 (a) of the Solvency II Framework Directive. But according to Guideline 8 of the Consultation Paper.

Art. 44, para. 2 of the Solvency II Framework Directive; see also no. 4.1 of the Consultation Paper (“all the risks”).

Guideline 15 of the Consultation Paper.

Statement of grounds for sec. 28 VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 287.

The statement of grounds for sec. 28 VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act] is silent with respect to the determination of significant change to the risk profile.

See above, n. 13.

Dreher, VersR (2008), 998 (1000).

The listing found in art. 44, para. 2 of the Solvency II Framework Directive denotes the minimum areas of coverage; see Gödeke, VersR (2010), 10 (13).

BaFin Circular 3/2009 – Minimum Requirements for Risk Management in Insurance Undertakings (MaRisk VA), with later amendments.

The Directive is based on the concept of double proportionality, meaning the relevance of proportionality both to the requirements imposed on insurance undertakings and to the exercise of supervisory authority.

Indeed, this is already inherent in the very concept of proportionality, but was specifically mentioned in CEIOPS, Draft Proposal for Level 3 Guidelines on Own Risk and Solvency Assessment (Article 45), 2010, (hereafter: Level 3 Proposal), no. 3.7.

See also on this point statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act] p. 286.

See in detail 5.7.1.3, below.

See art. 45, para. 1 of the Solvency II Framework Directive.

Brinkmann/Bruhns, VW (2011), 411 (413) speak of the ORSA in this regard as a “bracket around the three pillars of Solvency II”; similarly, Axer/Kaya, ZfV (2011), 543 (546) and Rief/Bender, VW (2011), 1493.

See above, n. 16.

Art. 45, para. 4 of the Solvency II Framework Directive; Nr. 9, 47 IP ORSA; see also sec. 28, para. 1, sent. 2 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act]. On the impact of the ORSA on business strategy, see also 5.7.1.3, below.

EIOPA understands art. 45, para. 1, subpara. 2 b of the Solvency II Framework Directive to mean that “continuous compliance” can be estimated with fundamentally “sufficient accuracy” and that constant recalculation is generally not required; No. 4.40 of the Consultation Paper. Nevertheless, EIOPA expects the insurance undertaking to be able to justify its preference of an estimate over a calculation.

See n. 32 and below, under 5.7.1.3.

Art. 45, para. 1, subpara. 2 a of the Solvency II Framework Directive.

Art. 45, para. 4 of the Solvency II Framework Directive; see also Guideline 14, no. 4.69 ff. of the Consultation Paper.

Implemented in sec. 115, para. 1, no. 1 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act].

See for example Weber-Rey/Baltzer, “Verlautbarungen der EU und der BaFin zur internen Governance von Banken” [in English: Pronouncements of the EU and BaFin (German Federal Financial Supervisory Authority) on the Internal Governance of Banks], in Hopt/Wohlmannstetter, eds., Handbuch Corporate Governance von Banken [in English: Handbook of Corporate Governance of Banks] (2011), p. 431 (447 f.).

Regulation 1094/2010/EU of the European Parliament and of the Council of 24 Nov. 2010, establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC of 24 Nov. 2010, OJEU L 331/48.

Response of the European Economic and Social Committee to the “Proposal for a directive of the European Parliament and of the Council amending Directives 2003/71/EC and 2009/138/EC in respect of the powers of the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority”, 2011/C 218/15.

See on this point Dreher/Lange, VersR (2011), 825 (829) (Chap. 1, above, at 1.3.2), with n. 28.

See statement of grounds of the 9th VAG [German Insurance Supervision Act] amendment, BT-Drucks. [Document of the German Bundestag] 16/6518 p. 15, 17 and Dreher, VersR (2008), 998.

There does exist, however, a legal obligation for the BaFin [Federal Financial Supervisory Authority] through the principle that an institution must itself comply with the rules it has made.

Given as example are the principles of proportionality and materiality that underlie both sec. 64a of the VAG [German Insurance Supervision Act] and the MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)] as well as the ORSA. The tailored-to-fit approach of Guideline 1 is also reflected in no. 4 (1) of the MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)]. Guideline 2 of the Consultation Paper has its counterpart in no. 6 (1) of the MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)].

See in detail on the limits of lawmaking by institutions not appointed for that function and on the considerable difference in this area between normative systems and technical rules, Rittner/Dreher, Europäisches und deutsches Wirtschaftsrecht [in English: European and German Economic Law] (3rd ed. 2008), sec. 7, ref. 58 f.

See Dreher, FAZ no. 216 of 17 Sep. 2009, p. 22.

See above, at 5.2.

See no. 7.3.2.2 (1) MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)].

See Schaaf id., n. 13, p. 124.

See Schaaf id., n. 13, p. 125.

See also no. 7.3.1 (1) MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)].

See art. 45, para. 2, sent. 2 of the Solvency II Framework Directive.

See also no. 7.3.1 (4) MaRisk VA [Minimum Requirements for Risk Management (Insurance Supervision)].

On the term “significance” see below, at 5.7.4.

See in lieu of multiple citations Wolf, in: Grabitz/Hilf, eds., Das Recht der Europäischen Union [in English: The Law of the European Union] vol. IV (40th ed. 2009) A 1 V 2 ref. 29.

On the term, see the draft of a new Insurance Core Principal [sic] of the IAIS (International Association of Insurance Supervisors), Insurance Core Principal [sic] 16 (Enterprise Risk Management) (2010), no. 16.1.10.

See sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act].

See on this point in detail 5.7.4.1, below.

See also in this respect, however, Consultation Paper (above, n. 17).

See above, at 5.3.

Dreher/Lange, VersR (2011), 825 (Chap. 1, above).

Art. 251 SG3, para. 3 of the draft implementing regulation provides for stress tests and scenario analyses as part of risk management only “where appropriate”. Also in this area, No. 4.6 of the Consultation Paper mentions stress test as a methodology for the ORSA process only as an example.

See on this point in detail, below, at 5.7.2.

Statement of grounds for sec. 28 VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 288.

On this point, see 5.8.3, below.

See the Statement of Grounds of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], General Part, p. 255, 257.

The draft refers to art. 102, para. 1 of the Solvency II Framework Directive rather than to art. 45 in conjunction with art. 35.

See the Statement of Grounds of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], General Part, p. 255 f.

See statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 287.

See also art. 48 of the Solvency II Framework Directive and sec. 31, para. 2 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act].

See art. 48, para. 1 i of the Solvency II Framework Directive.

According to the statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 287, “three to five years depending on the individual planning horizon of the undertaking” should be estimated for this. It is not sufficient to assume a one-year planning horizon such as that on which the standard formula is based.

See above, 5.2 and 5.4.1 as well as Axer/Kaya, ZfV (2011), 543 (545).

See on this point above, 5.4.3 at n. 65 and in detail at 5.7.2, below.

See also the statement of reasons for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 286.

No. 4.3 of the Consultation Paper.

Thus correctly, Meyer, “Anforderungen an das Governance System von Versicherungsunternehmen und -gruppen” [in English: Requirements for the Governance Systems of Insurance Undertakings and Groups], in: Bennemann/Oehlenberg/Stahl, eds., Handbuch Solvency II [in English: Solvency II Manual] (2011), p. 92, who views the ORSA in its “broadest sense as also a part of model validation”.

See also the statement of reasons for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 286.

Stating the equivalent weight of Pillar 1 and Pillar 2 in Solvency II, for example, Fopma/Klingeler, VW (2007), 2045 (2046).

See 5.7.1.3, below.

See above, at 5.2.

See on this point the implementation in sec. 30 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], which requires that internal audit review the “entire business organization”.

On the – disputed –relationship of European fundamental rights to the fundamental rights in the Charter, see Ehlers, in Ehlers, ed., Europäische Grundfreiheiten und Grundrechte [in English: European Basic Freedoms and Fundamental Rights] (3rd ed. 2009), sec. 14 I 6, ref. 24 ff. However, in the Test-Achats case of the European Court of Justice of 1 Mar. 2011 (case no. C-236/09 – VersR (2011), 377), the primacy of the Charter appears to be presumed (see Kahler, NJW (2011), 894 [897]). The European Court of Justice does not expressly take a position on this problem.

See Rittner/Dreher id., n. 45 above, secs. 4 ref. 43, 8 ref. 1, 9 ref. 1, and 11 ref. 59 with further references.

See on insurance supervision and its objectives, BVerwG [in English: Federal Administrative Court] VersR (1981), 221 (227) – DAS [German Legal Insurance (Automobile) Company] and on this point Dreher, Die Versicherung als Rechtsprodukt [in English: Insurance as a Legal Product] (1991), p. 215 ff.

In case of a high level of de facto binding and simultaneous regulatory density, an alternative analysis may be necessary here.

See above, at 5.4.1.

See on this point Ruffert, in: Ehlers, ed., Europäische Grundfreiheiten und Grundrechte [in English: European Basic Freedoms and Fundamental Rights] (3rd ed. 2009), sec. 16.3 III 2, ref. 36.

The freedom to conduct a business adds independent legal content to the freedom to choose an occupation in art. 15 of the Charter. Concerning the differences of opinion on this, in detail, Schmidt, Die unternehmerische Freiheit im Unionsrecht [in English: The Freedom to Conduct Business in the European Union] (2010), p. 184 ff.

According to Recital 16 and arts. 27, 28 of the Solvency II Framework Directive, the main objective is the protection of the insured and beneficiaries of indemnification payments. Subordinate to this and of equivalent weight are the objectives of financial stability and free, stable markets (see Dreher/Häußler, ZGR (2011), 471 [485] as well as Wandt/Sehrbrock, ZVersWiss (2011), 193 [195 ff.]).

See above, at 5.1 and n. 8.

See, briefly, Ruffert id., n. 89 above, sec. 16.3 III 2, ref. 38 with further references, mainly in the area of Common Agricultural Policy.

See Guideline 14 of the Consultation Paper: “The undertaking should take … into account … ”.

See no. 4.70 of the Consultation Paper: “Hence the ORSA feeds into the management of the business…”. Correctly in this respect, the statement of grounds for sec. 28 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act]: “[ORSA] must feed into the strategic decisions of the undertaking and be adequately taken account of in their context”.

Also in this sense, Meyer id., n. 78 above. In matters of business strategy, the undertaking must “comply” with the risk-bearing capacity and overall risk capital “at all times”.

This is also true for mutual insurance companies (see sec. 175, sent. 2 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act]), insurers organized as a Societas Europaea (see. art. 39, para. 1, sent. 1 of the SE Regulation) and according to the establishment acts for public insurance undertakings in German federal state law.

In detail, Dreher, in: Publication in Honor of Klaus J. Hopt on his 70th Birthday on 24 Aug. 2010 (2010), p. 517, 518 ff.

BGHZ [Decisions of the Federal Court of Justice in Civil Matters] (Ger.) (hereafter, BGHZ) 135, 244 = VersR (1997), 886 = JZ (1997), 1074 with comments by Dreher.

100

See on justification for the business judgement rule, for example, Spindler, in: Münch. Komm. zum AKtG [in English: Munich Commentary on the AktG (German Stock Corporation Act)], Vol. II (3rd ed. 2008), sec. 93, ref. 35.

101

See 5.3 and 5.7.1.1, above.

102

See 5.3, above in the context of the principle of proportionality.

103

Statement of grounds for sec. 28 VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 286.

104

See also 5.4.1, above.

105

See nos. 4.69 to 4.72 of the Consultation Paper.

106

See for insurance business management theory, for example, Farny, Versicherungsbetriebslehre [in English: Insurance Business Management Theory] (5th ed. 2011), p. 511 ff.

107

See No. 4.71 of the Consultation Paper.

108

Sec. 27, para. 2 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act] – currently similar to sec. 64 a, para. 1, sent. 4, no. 1 of the VAG [German Insurance Supervision Act] – correctly includes “a risk strategy aligned with the management of the business” in this.

109

See also Recital 36 of the Solvency II Framework Directive.

110

See CEIOPS, Internal Governance, Supervisory Review and Reporting Expert Group Issues Paper on ORSA – Feedback Statement 2008 CEIOPS-IGSRR-26/08, p. 1.

111

On the terms “Minimum Capital Requirement” (MCR) and “Solvency Capital Requirement” (SCR) see Recital 60 of the Solvency II Framework Directive.

112

No. 3 b, IP ORSA.

113

See CEIOPS, n. 110, p. 1 f.

114

See above, at 5.4.3 and below, at 5.7.4.

115

See above, section “The Task of the Managing Board and Monitoring of the ORSA by the Supervisory Authority” on the often-emphasized “primary internal nature of ORSA”.

116

See also the Journal of the BaFin [Federal Financial Supervisory Authority] 03/2011, p. 9; on other complications with interest guarantees, see Linde/Kutz, VW (2011), 409 (410).

117

No. 3 c, IP ORSA.

118

See arts. 37, 119 of the French version of the Solvency II Framework Directive: “significativement”; also, on the term “mesure” in art. 45 of the French version.

119

It is not more fully addressed in the statement of grounds for secs. 28 and 101 of VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act].

120

In fact, under sec. 25 a KWG [German Credit Services Act], an internal assessment of capital adequacy is to be conducted whose design intersects with the ORSA (Internal Capital Adequacy Assessment Process [ICAAP]). But the underlying Directive, 2006/48/EG (known as the banking directive), has no counterpart to art. 45, para. 1, subpara. 2 c of the Solvency II Framework Directive.

121

But not, for example, in the context of arts. 119 and 37 of the Solvency II Framework Directive.

122

Also compare the french wording (“la mesure dans laquelle le profil de risque … s´écarte … ”).

123

See 5.4.2 and n. 56, above.

124

See No. 4.53 of the Consultation Paper.

125

On this also, Sehrbrock, ZVersWiss (2011), 207 (special edition: Solvency II in der Rechtsanwendung) [in English: Solvency II in the Application of Law].

126

See above, n. 91.

127

See also No. 4.34 of the Consultation Paper.

128

On significance in this context, in detail CEIOPS, CEIOPS’ Advice for Level 2-Implementing Measures on Solvency II: Capital Add-On, 2009 (hereafter: Level 2 Add-on Advice), no. 3.3.2.

129

Art. 268 CA3 of the draft implementing regulation. The CEIOPS proposal in no. 3.50 of the Level 2 Add-on Advice already tends this way. In contrast, with respect to the ORSA for systemic reasons – the ORSA is part of Pillar 2 – a qualitative assessment must take precedence (see on this point below section “Systemic Restrictions”).

130

See art. 268 CA3, para. 3 in conjunction with art. 271 CA6 of the draft implementing regulation.

131

According to this, all possible quantifiable risks must be covered by the standard formula or the internal model used.

132

Art. 268 CA3, para. 1 of the draft implementing regulation.

133

See art. 268 CA3, para. 2 of the draft implementing regulation. Art. 266 CA1 of the implementing regulation contains a list of these qualitative characteristics. See also CEIOPS in No. 3.58 of the Level 2 Add-on Advice.

134

Guideline 13 of the Consultation Paper.

135

Guideline 13 of the Consultation Paper.

136

See Guideline 13 of the Consultation Paper (“materially”). For the reasons stated, insurance undertakings also have discretion in evaluation at this first step of the “material” deviation.

137

See No. 4.52 of the Consultation Paper.

138

No. 4.50 of the Consultation Paper.

139

In detail on the RSR, Dreher, ZVersWiss (2009), 187 ff. (Chap. 12, below).

140

See also the explanations of RSR and SFCR in CEIOPS’ Advice for Level 2 Implementing Measures on Solvency II: Supervisory Reporting and Public Disclosure Requirements, (2009) (hereafter: CEIOPS Reporting Advice), no. 3.30 ff. Also instructive, the diagram at no 3.25 of CEIOPS Reporting Advice; in detail on the SFCR, see Dreher/Schaaf, “Die Veröffentlichungspflichten von Versicherungsunternehmen gegenüber der Allgemeinheit nach Solvency II” [in English: Insurance Undertakings’ Duty of Disclosure to the Public under Solvency II] in: Dreher/Wandt, eds., Solvency II in der Rechtsanwendung, [in English: Solvency II in Legal Application], (2009), 129 ff. (Chap. 13, below).

141

Guideline 6 of the Consultation Paper.

142

No. 4.16. of the Consultation Paper.

143

Art. 45, para. 2 of the Solvency II Framework Directive, Guideline 4 of the Consultation Paper.

144

Art. 294bis SRS1bis, 282bis PDS1bis of the draft implementing regulation, according to which materiality is based on the addressee of the report. On the definition of materiality in consideration of the information requirements, see also No. 3.2.5 CEIOPS of the Reporting Advice with respect to the International Accounting Standards (IAS), Framework for the Preparation and Presentation of Financial Statements, available for download at http://www.iasb.org/NR/rdonlyres/578562B5-2303-4F51-8D02-382A7CBDBA7E/0/AP4Materialityobnotes.pdf.

145

Review by the persons conducting the ORSA is not permitted.

146

No. 3.15 and Guideline 5 of the Consultation Paper.

147

On their content see Guideline 4 of the Consultation Paper.

148

Additional detail on their content in Guideline 5 of the Consultation Paper.

149

Guideline 3 of the Consultation Paper.

150

Guideline 6 of the Consultation Paper.

151

No. 4.15 of the Consultation Paper; see on this point 5.7.1.3, above.

152

No. 51 IP 2008, see also the statement of reasons for sec. 28 VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act], p. 286.

153

Preparation of the regular report largely follows the SFCR; see art. 294 SRS1 of the draft implementing regulation.

154

See Zippelius, Juristische Methodenlehre [in English: Judicial Methodology] (8th ed. 2003), sec. 7 c, d.

155

For these, see 5.8.4, below.

156

Art. 285 PDS4, para. 4 of the draft implementing regulation does not specify the results as content of the SFCR.

157

For the objective of the report on the ORSA, see also No. 3.371 of the CEIOPS Reporting Advice.

158

Art. 45, para. 6 of the Solvency II Framework Directive.

159

See No. 3.25 of the Level 3 Proposal.

160

No. 3.27 of the Level 3 Proposal.

161

So also CEIOPS elsewhere in nos. 3.48, 3.315 of the CEIOPS Reporting Advice.

162

See above, at 5.4.1.

163

See on this point, 5.3 and 5.4.3, above.

164

See art. 51, para. 1, subpara. 2 b of the Solvency II Framework Directive and art. 282 PDS1 ff. of the implementing regulation.

165

Art. 53, para. 1 of the Solvency II Framework Directive, see also sec. 51 of the VAG-E [Government’s Ministerial Draft of a Tenth Act Amending the Insurance Supervision Act].

166

For a narrow construction, see also no. 3.71 of the CEIOPS Reporting Advice.

167

Information obligations pursuant to commercial and capital market law are meant here. In detail on this point, particularly with respect to the congruency of the risk report with information pursuant to commercial and capital market law, Dreher/Schaaf, n. 140, p. 160 ff.

168

See above, at 5.2.

169

See 5.7.2, above. No supervisory measure at all in the form of a capital add-on may be employed in cases where Solvency II itself knowingly negates a risk, such as in the zero-risk weighting of government bonds, which must then be accounted for in the ORSA framework – according to the German Federal Government, Response to a Parliamentary Question, BT-Drucks. [Document of the German Bundestag] 17/8225, 19 Dec. 2011, p. 10.

Title: Own Risk and Solvency Assessment
Author: Meinrad Dreher
Publisher: Springer Berlin Heidelberg
Book: Treatises on Solvency II
Print ISBN: 978-3-662-46289-8

Electronic ISBN: 978-3-662-46290-4

Copyright Year: 2015
DOI: https://doi.org/10.1007/978-3-662-46290-4_5

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