Financial institutions often serve many different customers in many different sectors, including customers in sectors with higher inherent integrity risks. The sector in which a customer operates is one of the factors that a financial institution...Read more
Solvency II: Pillar II Risk Management
Pillar 2 of Solvency II sets out the qualitative requirements that insurers must meet at both individual and group level.
Aiming to safeguard adequate risk management and governance, the Pillar 2 provisions are related mainly to the system of governance, including the own risk and solvency assessment (ORSA). The requirements are closely aligned with the provisions of the Financial Supervision Act (Wft) governing sound and ethical operational management. They cover insurers’ organisations and their operational management in general, the expertise and trustworthiness of their directors and key officers, their risk management, internal control, key functions and outsourcing. ORSA forms part of the risk management system and focusses on insurers’ own assessment of the risks they run and their associated capital needs.
Summary of Pillar 2
- Pillar 2: General and governance system
- Pillar 2 – ORSA
On 27 September 2013 the European Insurance and Occupational Pensions Authority (EIOPA) adopted and issued Preparatory Guidelines for Solvency II, including Guidelines on the System of Governance and ORSA. DNB applies these Guidelines in its supervision of insurers in preparation for Solvency II.