Prudent Person Principle (PPP) of insurance companies under Solvency II
General remarks
The German Association of Actuaries (DAV) welcomes the Federal Financial Supervisory Authority's draft on the Prudent Person Principle (PPP) for insurance companies under Solvency II and has no comments on the content from an actuarial perspective.
Additional note
The circular contains additional requirements for reporting and processes that are not specified in detail within the meaning of the PPP. The lack of concretisation could result in the required expenses of an insurance company going beyond what is necessary. This may also be because external parties are pursuing their own interests. This would then no longer be relevant and ultimately to the detriment of policyholders. We therefore suggest explicitly including a passage - qualitative in the sense of the PPP - that insurance companies must ensure that the depth and detail of the reporting and processes are implemented appropriately for the respective problem when implementing the circular. The principle of ‘as much as necessary, as little as possible’ should apply.
More on this topic in the blue box oder on the german website of the DAV.
