External audit of Solvency II regulatory returns and public disclosures

Consultation Paper CP 104

Under Solvency II companies are required to prepare a Solvency and Financial Condition Report (SFCR) on an annual basis. This report will contain quantitative information in the form of Quantitative Reporting Templates (QRTs) and qualitative information. The SFCR will be publicly disclosed.

The Central Bank of Ireland (Central Bank) have released a consultation paper (CP104) setting out their proposals regarding the external audit of elements of the SFCR. 

Who does it relate to?

The proposals apply to all those undertakings falling within the scope of Solvency II and regulated by the Central Bank. 

Some of the proposals will also apply to Solvency II groups where the Central Bank is the Group Supervisor.

What is Required?

The auditors will be required to produce a report which shall be made available to the Central Bank.  This report should include a reasonable assurance opinion on the elements of the SFCR relevant to the balance sheet, own funds and capital requirements. 

The auditor’s report will not be publicly available.

The audit will cover the following QRTs:

  1. Not in scope for undertakings using full internal models.
  2. In scope for Solvency II groups for which the central Bank is using the group supervisor.

The auditor will also be expected to do the following:

  1. Review relevant qualitative elements of the SFCR. 
  2. Assess whether the information disclosed in the SFCR which is outside the scope of the audit engagement is consistent with relevant elements of the SFCR and any other information to which the auditor has access.

Timelines

The deadline for responses to the consultation paper is 29th July 2016.  The Central Bank is aiming to determine their final policy position by end September 2016.

The Central Bank proposes to impose the external audit requirements for financial years ending on or after 31 December 2016.

What we can do for you?

If you would like any assistance in interpreting the consultation paper or in identifying and closing any gaps arising, please don’t hesitate to contact us.

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