The primary subject of this master thesis is Solvency II. Solvency II is a European project and is expected to be implemented in 2013 or 2014, presumed 2014. Solvency II is a regulation of the European insurance marked, and is defined in three general pillars. This thesis will examine the difference in effect of solvency II compliance requirements, related to the disparity in problems a large respectively a small company (according to Danish insurance scale) will face regarding the implementation. We will approach the problem statement by using the present Solvency II-directive and the law process behind, mainly based on the CEIOPS Advice. In addition to this approach this thesis will be based on two case studies. The case studies are respectively a small and a large company, according to Danish insurance scale. The use of these specific case studies is considered representative of the Danish life insurance business and lateral pension funds because of the prediction that the problems will be of similar nature for other insurance companies of similar size. The examination has proved that there is a difference in the problems met by small and large companies. The large companies are expected to force an obstacle originated from the fact that the Solvency IIdirective is not yet final. The large company structure requires the implementation to be prepared - a preparation that is difficult fully to complete when the final requirements are not yet known. Complimentary to this difficulty the small companies are expected to face problems regarding the requirements of establishing specific functions combined with the general governance requirements as separation of duties and four-eyes-principle. The major problem for the smaller companies regarding being compliant with the future requirements is that the smaller companies often may have relatively few employees which makes it difficult to establish new functions and be compliant with the general governance requirements mentioned above. It is our conclusion, that the small as well as the large companies will face problems regarding implementation of the Solvency II system of governance requirements. However the problems of the larger companies seem to be less critical. The requirements of Solvency II might end up in a situation where the small companies will focus mainly on being compliant instead of using Solvency II as an effective tool for risk management of the company.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||133|