19 February 2010
Published in: Software, Regulation - supervision
“IT systems integral to internal model”
Technology will play a significant role in successful Solvency II implementation and the chief information officer (CIO) will be a key player, according to a report from consultancy Deloitte.
"How the IT systems for Solvency II compliance are changed and managed is much more than simply an application of the internal model," the report Making the case for Solvency II technology says. "Rather, it is an integral part of the internal model itself." The report adds: "Demonstrating robust and reasoned plans for technology will be an essential part of the internal model for which approval will be sought."
It is "crucial", the authors say, that the CIO's team does not just receive the model, but plays an integral part in contributing to its design. The CIO is in a unique position to challenge the board from a business perspective, and can "really demonstrate his or her understanding of the key business imperatives...[and] earn their seat at the board."
A key challenge in implementing Solvency II technology programmes will be managing the relationship between actuaries, stakeholders and IT teams, the report argues. "Many IT and actuarial departments do not have a history of close cooperation...only through these functions working effectively together [can] the real benefits of the directive be realized."