The Solvency II Directive will require National Competent Authorities (NCAs) to deliver quantitative reporting information to EIOPA in XBRL format, but it allows each NCA to decide how to collect the data from firms.
Research conducted by Solvency II Wire reveals that currently over half of the NCAs intend to require or allow firms to report in XBRL after 1 January 2016.
Only about a third of NCAs will do so for the interim period. 20 NCAs responded directly to questions about their intentions to require firms to report in XBRL, both during the interim period and after implementation. Information for the remaining NCAs was gathered from industry sources.
The survey covers all Member States except Bulgaria. Details of specific requirements for individual Member States can be found in the Solvency II preparatory Guidelines interactive map.
Implications for firms
The implications for firms will vary from country to country given the range of options offered by NCAs for inputting the data and creating the XBRL file. For example, some will only accept reports in XBRL format, while others will also allow firms to use a web portal to input the data or accept reports in alternative formats.
Among those NCAs that will only accept reports in XBRL format some, such as Estonia and the UK, will leave firms to source a solution from the market or use the EIOPA XBRL Tool for Undertakings (TfU).
Others, such as Lithuania, will provide templates to help firms generate the XBRL reports. A number of NCAs will accept reports in XBRL format or provide an alternative reporting option (mostly through a web portal). The Danish Financial Services Authority, for example, said that from 1 January 2016 firms will have two options, either to report using XBRL by submission to its reporting portal or fill in a form which is a representation of the contents of the XBRL taxonomy in readable tables. The research also shows that five NCAs will not require XBRL reporting.
However, even here there are options. In Poland, for example, where the NCA has developed its own reporting tool, firms could still report in XBRL. One exception is the Czech Republic, where the NCA said it is preparing to accept XBRL report only from 2018. Until then firms are expected to use its reporting system. There are also several countries, including Ireland and Cyprus, where the NCA will require XBRL reporting but hasn’t yet specified how the reports are to be delivered.
Six NCAs have not yet decided which reporting format to use. In countries such as Hungary, the Netherlands and Spain the NCA was still considering the best option for their market.
The wide range of reporting options and requirements means that the impact for firms will vary depending the requirements set by the local supervisory authority. However, XBRL is only a delivery format. The true challenge is getting the right information into the report.