In addition to the ORSA report (cf. Chapter 3 above) and the reports by the management committee on the assessment of the effectiveness of the governance system (cf. Chapter 14 above), the main ‘qualitative’ reports are:

1. the Solvency and Financial Condition Report (hereinafter referred to as the ‘SFCR’), a report on an annual basis intended for the public, the content of which is set out in Delegated Regulation 2015/35 (Article 290 et seq.)[1];
2. the ‘governance system’ section of the Regular Supervisory Report (hereinafter referred to as the ‘RSR’), which is provided to the Bank every three years for the exercise of prudential supervision, the content of which is also set out in Delegated Regulation 2015/35 (Articles 308 et seq.); and
3. the governance memorandum, a report on an annual basis to the Bank, the content of which is set out in Article 42, § 3 of the Solvency II Law.

Since the entry into force of the Solvency II Law, the Bank has reviewed a large number of these reportings. It has also received requests to simplify the qualitative reportings in order to avoid overlap. In this context, the Bank noted that:

• the original coherence between the aforementioned reportings (with the governance memorandum being qualified as the ‘key reporting’ centralising all information on governance) should be reviewed;
• the system for submitting certain reportings to the Bank could be adapted;
• the frequency for submitting the RSR should be made more granular.

The main pillars for the review of the qualitative reportings are as follows:

1. the complete integration of the governance memorandum in the chapter on “Governance system” of the RSR (which is currently the ‘key reporting’ for all aspects, including those related to governance);
2. the revision of the frequency for submitting the RSR, which will become annual for significant companies and remain triennial for less significant companies (with annual notification of changes);
3. the revision of the procedure for submitting certain reportings on governance;
4. conditional authorisation to include references in the RSR;
5. definition of conditions to be complied with in order to be allowed to centralise multiple reportings in a single group report.

[1] Regarding language use for the SFCR, the executive summary should be drawn up in one or more national languages (depending on the location of the insurance company’s registered office) and the Bank allows detailed information to be drafted in a single language, i.e. in Dutch, French or English, the latter being commonly used in the world of finance.

The frequency for submitting the RSR has been revised. In practice, the frequency for submitting the RSR is no longer identical for significant insurance and reinsurance companies/groups and less significant insurance and reinsurance companies/groups.

In accordance with the proportionality criteria included in the introduction of this Circular, the following system applies:

• Annual submission for significant insurance and reinsurance companies/groups, and
• Triennial submission for less significant insurance and reinsurance companies/groups (with annual notification of changes),

in both cases without prejudice to the fact that the Bank can, at any moment, request a complete ad hoc revision of the RSR when it finds that the company or group no longer functions or is at risk of no longer functioning in compliance with the Solvency II Law.

As specified in the eCorporate Communication, insurance and reinsurance companies/groups are informed of their classification as “significant company/group” or “non-significant company/group” through an individual ad-hoc letter sent by the Bank. 

Moreover, by way of exception, the Bank reserves the right to compel less significant companies/groups to submit the RSR annually on the basis of their risk profile. In that case, they are informed of this decision by the Bank.

It should be possible to read the chapter on “Governance system” of the RSR as a standalone document. However, references to internal documents are allowed for specific detailed information.

In practice, the RSR should include a short summary by theme providing an overview of the topic covered, and references can be made to other documents for more detailed information. The RSR should not be a collection of cross-references.

Additionally, for references to detailed information, the Bank asks that the company tasks the independent control functions risk management and compliance specifically with coordinating the RSR, in order to ensure (i) that the RSR remains comprehensible and coherent, (ii) that the references made actually correspond to detailed information, and (iii) that these references are made to existing documents that are sufficiently detailed/accurate so the underlying information can be retrieved quickly.

Two independent control functions are tasked with coordinating and ensuring the coherence of the RSR. In this regard, please refer to sections 5.2.1. (risk management function - extra task relating to the coordination and coherence of the RSR) and 5.4. (compliance function - coordination and coherence of the RSR). Additionally, the rules described above, requiring the RSR to include a short summary by theme and allowing references to other documents for detailed information, also apply to the other chapters of the RSR. For these other chapters, the aforementioned coordination task is conferred upon the risk management function.