“Insurers are expected to hold eligible owned funds in excess of the Solvency Capital Requirement. There are two main methods of calculating the SCR under Solvency II, the standard formula and internal model methods.”

In this episode of “The Standard Formula” podcast, Rob Chaplin, host and head of Skadden’s Europe Financial Institutions Group is joined by colleague George Belcher to discuss Solvency II’s internal models (IM). Despite a higher cost of development, IMs offer numerous benefits, such as more accurate risk sensitivity, more flexibility and more available data. Rob and George also explore partial IMs, changes to existing models, the PRA approval process and implications of the U.K.'s move away from EU Solvency II standards.

Name: Robert Chaplin

Title: Partner, Insurance at Skadden

Specialty: Rob is the head of Skadden’s Financial Institutions Group in Europe. He primarily focuses on transactional and advisory work in the insurance sector. He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II.

Connect: LinkedIn

Name: George Belcher

What he does: George is European Counsel in the Financial Institutions and Insurance Groups at Skadden. He focuses on insurance-related public and private acquisitions and private equity investments, as well as regulatory issues in the insurance sector. He also frequently advises on matters related to Lloyd’s of London.

Organization: Skadden

Words of wisdom: “A firm may choose a partial IM where a particular aspect of its business does not fit well within the standard formula.”

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The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

“The Solvency Capital Requirement, or SCR, is designed to protect policyholders by helping to make sure that insurers can survive difficult periods and pay claims as they fall due.”

In this episode of "The Standard Formula" podcast, Rob Chaplin, host and head of Skadden’s Europe Financial Institutions Group, is joined by colleague Will Adams as they take an in-depth look at the Solvency Capital Requirement, one of Solvency II’s most important and complex provisions. The discussion covers the SCR’s key features, risk modules, how it’s calculated and its relationship with the Minimum Capital Requirement (MCR). They also discuss the standard formula (for an in-depth discussion of technical provisions, listen to the previous episode).

Name: Robert Chaplin

Title: Partner, Insurance at Skadden

Specialty: Rob is the head of Skadden’s Financial Institutions Group in Europe. He primarily focuses on transactional and advisory work in the insurance sector. He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II.

Connect: LinkedIn

Name: Will Adams

What he does: Will is a trainee solicitor in the Financial Institutions Group at Skadden.

Organization: Skadden

Words of wisdom: “The SCR can be calculated by either using the standard formula prescribed by the PRA rulebook and Solvency II, or by using a PRA-approved internal model bespoke to the company concerned.”

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☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, or your favorite podcast app.

The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

“Technical provisions are crucial, as they form the fundamental basis for assessing the financial stability of insurance and reinsurance plans.”

In this episode of “The Standard Formula” podcast, Rob Chaplin, host and head of Skadden’s Europe Financial Institutions Group, is joined by colleague Mary Bonsu. Rob and Mary delve into the complexities of technical provisions under Solvency II, shedding light on crucial elements such as best estimate of liabilities and risk margins. They discuss factors influencing these elements, such as financial guarantees, future management actions and risk-free interest rate term structures.The conversation also touches on methods to mitigate short-term volatility, and contrasts Solvency II with IFRS 17.

Name: Robert Chaplin

Title: Partner, Insurance at Skadden

Specialty: Rob is the head of the Financial Institutions Group in Europe primarily focuses on transactional and advisory work in the insurance sector. He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II.

Connect: LinkedIn

Name: Mary Bonsu

What she does: Mary is a trainee solicitor in the Financial Institutions Group at Skadden.

Organization: Skadden

Words of wisdom: “Technical provisions can be seen as an insurer's main reserves.”

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to The Standard Formula on Apple Podcasts, Spotify, or your favorite podcast app.

The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.