The FSB’s recent SAM 2013 Update provides detail on the SAM parallel run, which is the process which will require insurers to calculate and report information in accordance with the SAM proposals. The main objective of the parallel run is to aid in the transition and implementation of the new SAM regime. Moving to the SAM regime also has wider implications that extend beyond insurers, as auditors and the FSB also need to prepare for these changes.
Given that SAM will not yet be legislated during the parallel run phases, the current Long- and Short-term Insurance Acts’ requirements and regulatory return submissions will also need to be complied with. There will therefore be extensive demands on finance, risk and actuarial teams over this period to perform the compulsory SA QIS 3 exercise from October 2013 to March 2014, the two parallel runs in 2014 and 2015, while at the same time also complying with existing regulatory requirements.
Within this context, we have conducted a high-level survey to obtain initial views from insurers on the practical implications they foresee as a result of the parallel runs. In this survey, we have identified some of the major challenges foreseen as well as the different opinions expressed.
We believe insurers will find these insights useful in benchmarking and evaluating their own readiness for the SAM parallel runs. If you wish to discuss this publication in more detail, please contact your usual PwC contact or those listed at the end of the publication.