Solvency II is driving changes in insurance companies from the Board through to the wider organisation. The first article of this two part feature looked at the effects of Solvency II on individual members of the Board. The second part looks at the work of the Board as a whole under Solvency II.
Blurring boundaries


Solvency II requirements for the Board
The Solvency II Directive outlines six key areas of responsibility for the Board: implementation, risk appetite and business strategy, the company risk management system, risk management culture, the Internal Model, and internal and external disclosure. Neil Cantle, Principal and Consulting Actuary at Milliman, said that Solvency II is more specific about the areas where the Board is expected to challenge the executive, particularly in risk management and governance.
A delicate balance
There is a balance to be struck here that, in some cases, firms have not yet managed to get right. David Simmons, Managing Director, Analytics at Willis Re, is critical of the way some firms are going about the process. “I have heard of cases where Board meetings lasted three to four hours discussing risk management details. This is not acceptable practice.”
Non-executives reconsidering
Increased engagement and understanding of the business is not the only strain being placed on the Board’s function. The stringent legal demands and the need to grasp actuarial modelling concepts could be deterring some from taking on a non-executive role. This could mean a loss of key board members that provide a vital high level view and steering for the business; putting further strain on the Board’s ability to remain detached from the firm.Concerns about the Solvency II text
