Solvency II mandates Data Governance

Welcome to part 3 of Solvency II Standards for Data Quality – common sense standards for all businesses.

Regardless of the industry you work in, you make critical business decisions based on the information available to you.  You would like to believe the information is accurate.  I suggest the CEIOPS’ standards for “Accuracy”apply to your business, and your industry, just as much as they apply to the insurance industry.  I would welcome your feedback…

The CEIOPS (now renamed EIOPA) advice makes it clear that Solvency II requires you to have Data Governance in place (which CEIOPS / EIOPA refers to as “internal systems and procedures”).   The following sections of the document make this clear:

3.32 In order to ensure on a continuous basis a sufficient quality of the data used in the valuation of technical provisions, the undertaking should have in place internal systems and procedures covering the following areas:

• Data quality management;

• Internal processes on the identification, collection, and processing of data; and

• The role of internal/external auditors and the actuarial function. Data quality management – Internal processes

3.33 Data quality management is a continuous process that should comprise the following steps:

a) Definition of the data;

b) Assessment of the quality of data;

c) Resolution of the material problems identified;

d) Monitoring data quality.

I will explore the above further in my next post.  Meanwhile, what Data Quality Management processes do you have in place?  Do you suffer from common Enterprise-Wide Data Governance Issues?

6 thoughts on “Solvency II mandates Data Governance

  1. I think you’ve hit the nail on the head here about the point that Solvency 2 applies to EVERY organisation.

    In the series we’ve been running over on Data Quality Pro focusing on Solvency 2 and your Single Customer View paper it’s striking how diverse the companies are that download these materials.

    This is really encouraging, companies can use these new directives as an assessment tool (and wakeup mechanism) to examine their own processes.

    Great series building up here Ken, good content.

  2. Thanks for the positive feedback Dylan,

    “Things” we depend on in our every day lives, such as electricity supply, water supply, the World Wide Web, etc. are made possible by applying “Standards”.

    Delivery of “clean”, “accurate”, “reliable” information requires similar “standards”. The Solvency II regulations provide a set of standards that can be used by all organisations.

    Rgds Ken

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  5. If the orgqanisation is using a 3rd party to host the data and the third party hosts data for multiple organisations which leads to complexity as you cannot view your own data due to multiple companys data and data protection. I understand its the parent companys resposibility to quality check their data but is it compulsory to read the data from source or trust the 3rd party for the information? What does Solvency 2 suggest in this case?

  6. Hi Shw,

    Good question. I presume you are referring to external data provided by a 3rd party (when you say “host the data).

    It is not compulsory, nor would it be practical, for the parent company to attempt to verify the data within the 3rd party’s systems. My understanding is that the external data provider should demonstrate the its data quality management processes, and the quality of it’s data to an independent body (e.g. external auditor). The parent company should seek confirmation from the independent body.

    I hope this helps,

    Rgds Ken

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