Solvency II and XBRL: new rules and technologies in insurance supervision

Abstract

Purpose The purpose of this paper is to analyse the way in which the insurance industry is facing the renewal of its regulatory framework with respect to the levels of solvency that insurance entities should maintain. This paper also addresses how technological initiatives in general, and the eXtensible Business Reporting Language (XBRL), in particular, are making a key contribution to the process of adaptation to the new regulation. Design/methodology/approach The paper analyses the particular advantages that the application of the XBRL standard can offer in this process, and highlight new lines for further research. Findings After analysing the current situation of the insurance industry, the paper concludes that technological systems, such as XBRL, are necessary to support the consolidation of financial information, and to ensure the digital transparency of the insurer organisations that are engaged in this new regulatory challenge. Practical implications XBRL is a key resource in the European Common Reporting Project whose objective is the implementation of Basel II in the European Union. The implementation of Solvency II can benefit from this previous experience. Therefore, it suggest a proposal for action. Originality/value The affiliation of the authors to the insurance sector, the academia and the XBRL community contributes to create a complete view of the possibilities of this breaking project.

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