The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has published its report on the outcome of the stock-taking exercise on the current use of internal models in insurance, following its approval in the Members' Meeting of January 21st, 2009.
The report is the result of an exercise initiated in late 2007 by the CEIOPS' at the request of the European Commission.
The objectives of this stocktaking exercise were three-fold:
- Improve supervisors' understanding of current industry practices on internal models and foster discussions about the application of models both for risk management and regulatory purposes;
- Raise industry awareness on the need to start engaging with supervisory authorities from the early stages of planning, development and implementation of their own internal models, i.e. well ahead of actual application for approval; and
- Provide CEIOPS with the necessary information to support the preparation of its proposals for the Level 2 implementing measures for the Solvency II Framework Directive Proposal (in respect of Internal Models).