The subject of this master thesis is the Solvency II directive. Solvency II is a European directive, the purpose of which is regulation on the Insurance market. The directive was implemented in EU law in 2014 and later on in the Danish legislation in 2015.
This master thesis will examine the result of the implementation of the Solvency II directive.
The reason for the change in the law is due to the circumstances on the financial market, which, because of the financial crisis in 2007 and 2008, has given the individual basis to question the financial market and the risk this market is are willing to take on the individuals behalf. The reason why the EU has introduced the new Solvency II-directive is to secure the policyholder going forward, but also due to the fact that the directive Solvency I was 30 years old and the EU does not see the decretive can be used on the current market situation.
This master thesis will cover the practical consequences of Solvency II and the Danish Executive order on "Bekendtgørelse om ledelse og styring for forsikringsselskaber m.v." for insurance companies.
This master thesis will focus on the Danish market for small insurance companies.
To analyse the practical consequences of Solvency II and the Danish Executive order on "Bekendtgørelse om ledelse og styring for forsikringsselskaber m.v.", I have analysed the hearing memorandum from the hearing of the Danish Executive order, which reflects the opinion of relevant parties in the insurance industry.
To support the hearing memorandum, I have performed an empirical study of the representatives in the insurance market, who have discussed the difficulties as a consequence of the new directive and the new Danish legislation. In addition, they have also illustrated that they have complied with the law and what initiatives they have taken to implement the law in their organisation. Some of the initiatives they have taken to comply with the law regarding having an internal audit function is by outsourcing the function to a third party, split the responsibility of the four functions between current employees and as a last solution one company has hired an external person to work part-time in the organisation.
The representatives in the insurance market states a clear opinion on the new legislation, which they believe is an administrative burden for them to comply with. The many representatives do not believe it has any impact on the market and does not see any reason for the legislation on their level.
A few representatives see the directive to contain a positive outcome for the industry and they think the directive will give new tools going forward to analyse and assess the risk in the company.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||98|