Today CEIOPS released its assessment of how ready supervisors (we call them regulators in the U.S.) are to implement Solvency II. (Current deadline is year-end 2012.) The news (rippped and read from the press release):
- Implementation of Solvency II is well under way in all surveyed supervisory authorities.
- Supervisors’ transition to the new solvency framework is proceeding at an increasing pace.
- The Solvency II Working Groups, CEIOPS’ training of staff, the different QIS exercises and the pre-application for internal models were identified as the main drivers of the overall process of Solvency II implementation within supervisory authorities.
I love the self-congratulation on that last item. So everything’s ducky, right?
Of course not – PwC notes that some supervisors are ahead of others, and things could get tight soon. Quoth Charles Garnsworthy, partner at PwC:
There is clearly still a lot of work for some regulators to do to get up to speed. Many are in the process of bringing their local firms’ supervisory teams into the action, but there is still a significant amount of work to be done in some territories as companies and regulators compete against each other for the same scarce resources.
The CEIOPS report notes that supervisors will have to increase their staffing by 20% to handle the extra work load. Particularly important is capital modeling, where there’s a worker shortage. From the report:
Staff involved will need to acquire new competences, particularly in the area of actuarial and financial mathematics.
The area of internal models represents possibly the most challenging one for supervisors.
All of which leaves companies a little queasy, InsuranceERM.com reports. They remain worried that supervisors won’t be ready by 2013, and talk of employee shortages and QIS6 won’t help on that score.