Rank regulated cases for an analyst

Fields

• Summary section of the solvency and financial condition report

Questions

1. Is this text the summary of an insurer's solvency and financial condition report? Yes / No

   Answer No for another section of the report, a press release, annual accounts or a text cut off before it covers the areas of the report. Yes: The text is the summary of an SFCR. No: The text is something else, or too incomplete to judge as a summary.

2. Does the summary leave out, for any of the five areas, what changed since the previous reporting period? Yes / No

   Check each of the five areas named in the context. An area counts as covered when the summary says what changed in it, or says nothing material changed. An area the summary does not mention at all is not covered. Yes: At least one of the five areas has no statement of what changed. No: Every one of the five areas says what changed or that nothing material changed.

3. Does the summary say whether the insurer met its SCR and MCR during the period? Yes / No

   Count a plain statement about both requirements, such as "covered its SCR and MCR at all times". A solvency ratio alone, with no statement about the MCR or about the whole period, does not count. Yes: The summary says whether both requirements were met over the period. No: The summary does not say this for both requirements.

4. Does the summary say the insurer did not meet its SCR or MCR at some point in the period, or expects not to? Yes / No

   Go by what the summary states; do not work out ratios. Coverage below the board's own target range, while the SCR is met, is not a breach. Yes: The summary reports a breach of the SCR or MCR, or expects one. No: The summary reports no breach and expects none.

5. Does the summary report a capital action taken or planned, such as new capital, a debt issue, a cut in dividends or a recovery plan? Yes / No

   Count raising capital, issuing or repaying subordinated debt, cutting or stopping dividends or member payments, new capital reinsurance, a recovery plan, or a plan to slow growth to protect solvency. Yes: At least one such action is reported as taken or planned. No: No capital action is reported.

6. Does the summary report a change of directors or key function holders, or a failing in the system of governance? Yes / No

   Count a new or departing director, chief executive, chief financial officer, chief risk officer or head of a key function such as actuarial, compliance or internal audit, and any governance weakness the summary admits. Yes: The summary reports such a change or failing. No: The summary reports none.

7. Which area of the report should the analyst read first? Choice

   Pick the area of the most serious point in the summary under the priority rules. When points in two areas are equally serious, pick the first in this order: Capital, Risk profile, Valuation, Governance, Business and performance, Reporting.

   • Capital management Own funds, the SCR and MCR, solvency coverage, capital actions or a recovery plan.
   • Risk profile A change in the risks the insurer carries, such as catastrophe exposure, reinsurance or investment risk.
   • Valuation for solvency purposes How assets, technical provisions and other liabilities are valued, including a change of method or model.
   • Governance The board, key function holders, risk management, internal control or outsourcing.
   • Business and performance Premiums, underwriting results, investment returns, and new or closed lines of business.
   • Reporting The summary itself falls short: an area is left out, or it is unclear or not written for policyholders, with no more serious point elsewhere.

8. How soon should an analyst review this report, under our priority rules? Scale

   Use the priority rules in the context and pick the highest level that any statement in the summary meets.

   • Low All five areas covered, nothing material changed, and the SCR and MCR met throughout.
   • Normal Changes are described, and none of them bears on solvency.
   • High A material change that bears on solvency, a capital action or a governance failing, or an area left out, with no breach reported.
   • Urgent A breach of the SCR or MCR reported or expected, a recovery plan after a breach, or a doubt about the insurer continuing in business.

Lens columns

is_sfcr_summary, is_sfcr_summary_probability, required_comparison_missing, required_comparison_missing_probability, solvency_position_stated, solvency_position_stated_probability, capital_requirement_breach, capital_requirement_breach_probability, capital_action, capital_action_probability, governance_change, governance_change_probability, area, area_probability, priority, priority_average