RISK PROFILE DISCLOSURE REQUIREMENTS FOR ITALIAN INSURANCE COMPANIES: DIFFERENCES IN THE FINANCIAL STATEMENT PREPARATION

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1 RISK PROFILE DISCLOSURE REQUIREMENTS FOR ITALIAN INSURANCE COMPANIES: DIFFERENCES IN THE FINANCIAL STATEMENT PREPARATION Abstract: The content of the annual report of insurance undertakings is regulated by art.2428 of Italian Civil Code, as well as by the Insurance Code and specific Italian Insurance Supervisor s regulations. The paper compare the existing legislations, providing an overview of the different requirements, with particular attention to the risk profile disclosure. Moreover, the paper analyzes a significant sample of Italian insurance groups annual reports (2009 financial year), in order to highlight the level of compliance with the existing rules and the level of preparedness for the upcoming Directive 2009/138/EC requirements (Solvency II Directive), which will come into force starting from 2012 financial year. Key words: annual report, disclosure, financial statements, insurance risk profile, Solvency II, Solvency and Financial Condition Report (SCFR) Riassunto: La relazione sulla gestione di una compagnia di assicurazione è disciplinata dall art.2428 del Codice Civile, ma anche dal Codice delle Assicurazioni Private e dalla normativa secondaria emanata dall Istituto di Vigilanza delle Assicurazioni Private. L articolo confronta le legislazioni vigenti, fornendo una panoramica delle diverse norme, con particolare riguardo alla divulgazione inerente il profilo dei rischi. Vengono, inoltre riportati i risultati dell analisi condotta su un campione dei principali gruppi assicurativi italiani, con riferimento all anno di bilancio 2009, esaminando sia al grado di conformità alle norme in vigore, che il livello di preparazione rispetto alla imminente entrata in vigore della direttiva comunitaria SolvencyII. Parole chiave: relazione sulla gestione, disclosure, bilancio, profilo di rischio, Solvency II, Solvency and Financial Condition Report (SCFR)

2 1. INTRODUCTION In the current difficult economic and market conditions, the preparation of financial statements assumes a particular relevance and requires all those who are involved (firstly the Boards of Directors), careful disclosure considerations to be made. In particular, there are strong expectations by the users of financial information (such as analysts, investors) of the capability to represent in a clear, comprehensive and transparent way the risk-profile and the uncertainties faced by the company. In the last years, the increasing use of the financial markets by companies has led to a growing demand for non-monetary information, in addition to those accounting specific, raising the levels of quality and quantity information about the company (Alvino, 2001, p.4). In this context, the annual report relating to the company s financial statement, can not longer be a mere compilation of few pages, which reproduce the main financial information, without any evaluation or comment by the management. This report should be a responsible and clear representation of the company s business and activities and its peculiarities, with specific and detailed references to the forseeable development of management (CNDCEC,2009). Article 2428 of the Italian Civil Code requires that directors provide, in the aforementioned report, a fair, balanced and comprehensive description of the company situation, and an illustration of the principal risks and uncertainties; it is also required the consistency between any reported information with the amounts of the financial statements. As many authors support, the purpose of the rule is twofold: on the one hand it allows the management to submit all the information about the economic and financial situation (past, present and future) in-house (Coda, 1991, p.44-45) and on the other, the definition of a mandatory disclosure provides to all external recipients the information of interest (Marasco, 1988, p.17-19). Moreover, article 2428 is mandatory because requires a minimum set of information, but can be considered on a voluntary disclosure basis referring to contents, level of details and any other additional information that the 2

3 Board decide to report (by its discretion), following corporate strategies (Alvino, 2001, p. 5-6). Insurance companies are certainly not excluded from the scope of article 2428, for which, moreover, due to the peculiarities of the risk profile, the annual report is subjected to specific and detailed additional requirements, under the Insurance Code and the legislation issued by the Insurance Supervisor Authority (ISVAP). In fact, the foundation law of the authority provides the operational capability of the standing legislation supervisory role of ISVAP (L. 586/82). Especially, for the insurance undertakings can not be ignored the new rules governed by the European Solvency II Directive regarding also the public disclosure and financial reporting. For this purpose, it is interesting to compare the current state of Italian legislation and the effort of insurance companies to adapt their financial statements, starting form the 2012 financial year, to new requirements in order to be ready for the European insurance market. 2. REGULATION ON ANNUAL REPORT RELATED TO FINANCIAL STATEMENTS FOR ALL COMPANIES: ARTICLE 2428 OF CIVIL CODE Starting from 2008 financial year, Italian companies should apply the rules reported in the legislative decree 32/2007, implementation law of the European Directive 2003/51/CE, related to annual and consolidated account for specific companies, banks and credit institutes, and insurance companies. The aforementioned transposition of the Directive has strongly influenced the preparation of the consolidated balance sheet and, in particular, the annual report connected to the financial statements of the companies interested. An immediate and significant consequence has been the modified text of the article n of the Civil Code, referred to the annual report. From the discussion concerning the new wording of the aforementioned article, it is emerging that << the annual report is enriched with a broader role that elevates it to one of the most important vehicle of information about the evolution of business management>> (IRDCEC, 2008). 3

4 This particular attention towards the annual report relating to financial statements is due to its external relevance: the content is not intended to disclose how the detailed technical and economic resources are managed by the company (to this purpose the internal accounting and reporting is available). The aim is: -to complete and supplement the financial statements, in order to allow external users to know the correct and current situation of the company and its economic performance (Catturi, 2009; Colombo, 1994, GISMONDI et al. 1999); -to possess a better understanding of the company prospects and both its general risks and uncertainties; -to evaluate all information on the success of management s strategies that are not directly be inferred from the general accounts. Moreover, as stated in art. 2428, the report looks not only at the past (explaining the main trends observed) and at the present situation, but also at the future, containing a description of the predictable evolution, showing the excess or the occurrence of past problems and illustrating future prospects (Colombo, 1994). It seems appropriate here to highlight two crucial new elements, required in the article n. 2428: - the description of the principal risks and uncertainties regarding to which the company is exposed; - the introductions of financial indicators and non-financial indicators, relevant to the specific activity of companies. On the first point, a narrative illustration about the main risks is required, which could have a relevant impact, considering their probability to occure. This requirement clearly reflects the recent approach, widespread and estabilished by the European directives discipline, aimed at interpreting, monitoring and controlling the companies activity and their solvency capacity following a risk-oriented analysis. Besides, with respect to the second point, quantitative indicators are now introduced into the report. Following the interpretation given by the CNDTEC (2009), financial indicators are those that can be extrapolated from the general accounting (frequently desumed from financial statements), differently from the non-financial, that are still quantitative indicators, but useful, when needed, to explain all those other factors having an influence on the company s situation. Moreover, dlgs 32/2007 introduces a new comma in article 2409 of the Civil Code, where the rule explicitly requires that the Board should 4

5 comment also on the consistency between annual report and financial statements. Interested companies should prepare the annual report, regardless the fact that financial statements are compiled following the international accounting standards (IAS/IFRS) or according the civilistic rules. It is important to underline that all the information and contents required should be provided coherently with the size and complexity of the company s business (as reported in art. 2428), according to a sort of proportionality principle connected to quantitative parameters that identify small, medium and large companies (dlgs 32/2007). Finally, to avoid making the report less readable, companies should illustrate the most significant and relevant information, for a correct and exhaustive explanation and overview of the company. 3. INSURANCE COMPANIES RISK PROFILE IN THE FINANCIAL STATEMENT Under Italian legislation, the rules illustrated in the previous paragraph shall also apply to insurance undertakings. In particular, these companies are specifically regulated by the Private Insurance and Reinsurance Code, that in the Title VIII lays down rules concerning <<FINANCIAL STATEMENTS AND ACCOUNTING RECORDS>>(dlgs 209/2005) and articles 94 and 100 list all the requirements about the preparation of the annual report. The dispositions contained in the title should be applied, to all insurance/reinsurance undertakings with a Head Office in the territory of the Italian Republic and to branches of undertakings with Head Office in a third State, authorized to pursue life or non-life insurance or reinsurance in the territory of the Italian Republic. Moreover, article 90 says that <<the powers of ISVAP are exercised in line with the international accounting standards with regard to subjects who draw up financial statements or consolidated accounts in compliance with the international accounting standards>>. Those companies which do not apply the IAS/IFRS standards, shall prepare their financial statements in compliance with legislative decree n.173/

6 In this last case, article 10 of dlsg 173/1997 contains the rules about the redaction of the annual report, following the dispositions found in art.2428 of the Civil Code REGULATION ACCORDING D.LGS. 209/2005: A COMPARISON WITH ART.2428 OF ITALIAN CIVIL CODE The aim of this paragraph is to compare the general rules, contained in the Civil Code, with rules that should be met by insurance companies, possessing elements of similarity introduced by the issuance of the dlgs 32/2007 and highlighting the integrations, detailed in article 94 of the Insurance Code, for insurance companies connected to their specific and peculiar risk profile (dlgs 209/2005). As for other companies, insurance undertakings should prepare the annual report following a fair, balanced and comprehensive analysis together with a description of the principal risks and uncertainties. This could help to better understand the company s situation, considering that, as some authors argued, the balance-sheet schemes are sometimes a limitation to explain the result of the company, due to the level of detail and technical requirements (Lusvarghi, 1990, p.188), causing loss to the brevity and clarity needed for the financial statement (Cattaneo et al.,1992, p.287, Di Cagno et al., 1994, p ). Identifying the specific information that the report shall anyhow disclose, the rule points out the following distinctive marks: - changes in the insurance portfolio; - claims frequency in the main insurance classes pursued; - most significant reinsurance arrangements used in the main insurance classes pursued; - information about litigations, if relevant. Concerning changes in the insurance portfolio, the management of the insurance company is expected to illustrate, for example, the amount of the premiums in the financial year and a comparison with the previous years. In this way a specific historical of the premiums could be identified and users could be able to know in which class the undertaking s business is more successful, or, differently, why some classes are less preferred then others or, more, whether the evolution of the main profit of the undertaking is in line/decreasing/increasing comparing with past years. 6

7 The insurance portfolio and its evolution can also be described following the changes in the distribution network, which could help or not in the commercialization of the insurance products. The same relevance is given to the claims frequency, as a measure of one of the main risk of losses for an insurance company. The valuation of this risk, from the company s perspective, can be the measure (as known in literature) of the probability of ruin, where there is a negative variance between estimated and actual frequencies (Ottaviani, 1981, p.79). This information has to be disclosed for the different classes, and allow to identify in which classes (life or non-life but also sub-classes in life or non-life branches) the proceeding of the frequency could be expression of concerns or, differently, a symptom of positive development.. Also the reinsurance arrangements (the most significant), represent a peculiar aspect of the insurance undertaking: in fact, a wrong policy of reinsurance does not allow an equilibrate and adequate distribution of the risks or, for example, a no reliable reinsurer could produce sensible losses for the undertaking (counterparty default risk). Concerning the last point listed above, litigations could configure a significant risk of loss if the number, the amount and the duration of lawsuits are far higher than the commitments or with respect to previous estimates (some exposure classes are particularly subjected to this risk, as for example general liability insurance). The specific information required must refer to the individual classes of businesses, according to the already mentioned annual report function of illustrating and completing the financial reporting (Di Cagno et al., 1994, p.280). The information described is so peculiar, that the rule is concerned with a description, in the annual report, not only from the perspective of the past trends in the evolution until the present, but also for <<the foreseeable development of the management, with special regards to the changes in the insurance portfolio, the claims frequency and any changes in the reinsurance arrangements adopted>> (dlgs 209/2005, art.94). Another specific requirement for managers is to illustrate new products on the market and let the users identify whether the policy of new commercialization is encouraging or not the development of the company (Research and Development area). As for all other companies, it is however important to underline that insurance undertakings managers should compile the annual report according a proportionality principle (consistent with the size and the 7

8 complexity of the business), and, where appropriate, include references to additional explanations of amounts reported in the financial accounts. All Insurance Code additional requirements, as shown, relate to the consideration of all the purely technical insurance risks, not present in companies operating in different market sectors. All other article 2428 requirements have been replicated in the Insurance Code because relating to risks which also companies that carry on insurance business are exposed. Finally, the Insurance Code distinguishes the case of a single company (article 94) from the case of a company which control one or more other companies, and that shall draw up their consolidated accounts (article 100). The comparison, here, was made between art of the Civil Code and art.94 of the Insurance Code, which is more complete and detailed than article 100. This is due to the fact that companies can accompany the consolidated accounts with a single report, which put together the two reports respectively referred in paragraph 1 of art.100 and in art.94, emphasising <<( )those matters which are significant to the undertakings included in the consolidation taken as a whole>> (dlgs 209/2005, art.100) ITALIAN INSURANCE AUTHORITY REGULATION As acted in its article 90 of the Insurance Code, ISVAP <<( )shall, by its own regulation, set out the layout of accounts, the chart of accounts undertakings must adopt in their management( )>>; moreover, <<ISVAP may also estabilish the documents required for the performance of supervision over financial statements and consolidated accounts>>(dlgs 209/2005, art.90). In this regard, ISVAP has issued two Regulations: - Regulation n. 7, , on the accounting schemes for insurance and reinsurance undertakings which are held the adoption of international accounting standards (ISVAP, 2007); - Regulation n. 22, , on the accounting schemes for insurance and reinsurance undertakings (ISVAP, 2008); With the primary objective of monitoring and controlling the insurance undertaking s activity and risk profile, the supervisor is concerned with having access to additional documentation at an intermediate stage of the financial year, i.e. at the end of the first semester. Indeed, irrespectively of the method used to prepare the financial statements (according or not IAS standards), both regulations require the 8

9 redaction of a first-half report which is defined, in article 2, as a report on the general management and operations of the undertaking for the first half of the year. The first-half report is compiled with the same information required for the annual one, underlying all the components of the technical risks which may become sources of loss and be critical for the solvency stability. With specific reference to future performances of the undertaking, the regulations ask for a foreseeable development of the management based on the first semester of the financial year. All information required should be consistent with the financial statements. With respect to this, the regulations contain specific schemes to be referred to in compiling the first half year report. The Board of Directors has three months, after the end of the first half, to approve the report. Moreover, the supervisor requires that the first half report is accompanied by the report of independent auditors and observations and comments made by internal auditors and, with regard to the technical provisions, a further assessment is required by the appointed actuary of the company. All this documentation should be transmitted to ISVAP within one month after the adoption, together with a copy of the resolution of the minute of the Board. The same approval and transmission procedure is issued in Regulation n.7, with reference, for an insurance group, to the consolidated first half year report. The importance of a complete and exhaustive information required by the Insurance regulation is also mentioned in a joint document signed by Bank of Italy/CONSOB/ISVAP (BANCA D ITALIA/CONSOB/ISVAP, 2009). With this document, the three authorities want to draw the attention of the Board of Directors and to emphasises that in the annual report an accurate, reliable and complete analysis and description of the principle risks and uncertainties which the company is exposed should be provided. 4. LOOKING TO THE FUTURE INSURANCE REGULATION: THE ENTRY IN FORCE OF SOLVENCY II DIRECTIVE 9

10 4.1. THE EUROPEAN COMMUNITY LEGISLATION Directive 2009/138/EC is a mandatory regulation that will affect all insurers and reinsurers in the EU when it comes into effect at the end of European Commission is working on the implementing measures mentioned in the level 1 text of the directive, about technical aspects, divided into Quantitative Requirements (Pillar I), Supervisor Review (Pillar 2) and Market discipline (Pillar 3). About this last pillar, Solvency II Directive wants to indicate transparency and disclosure requirements, which include the new Solvency and Financial Condition Report (SFCR) that undertakings will be required to publish on an annual basis. The aim is to give a level playing field and a standard among EU member states, in order to provide all users (intermediaries, policyholder and other counterparties) a greater level of uniformity and transparency. But transparency and comparability are relevant not only from an international accounting point of view (Reali, 1999, p.151): the management itself recognizes that transparency and comparability in the information are an opportunity to contribute to strengthening confidence in the insurance sector, given the prominence of providing correct and timely information to financial market (Agliata, 2007, p.137). The SFCR should illustrate solvency and financial conditions, following a predefined disclosure structure, and should describe four main areas of the insurance undertaking activity: - business and its performance and governance system; - risk exposure, by each risk category; - methodologies and valuation techniques used for assets and liabilities; - detailed information on the Minimum and the Solvency Capital Requirements. To date, insurance undertakings already produce narrative documents about these elements, within existing regulatory or internal publications; however, a standard structure will ensure a more accurate, complete and comparable disclosure. Moreover, the general direction of the Community rules is moving towards a clarification of the purpose of the financial reporting, as hoped also in the Italian national doctrine (Marasco, 1988, p.259). 10

11 4.2. EIOPA (European Insurance and Occupational Pensions Authority) LEVEL 2 MEASURES PROPOSAL Articles 51, 53, 54, 55, 56, 256 of the Solvency II Directive indicate the rules to be followed by insurance and reinsurance undertakings about the SFCR (DIRECTIVE 2009/138/EC). <<In its letter of 19 July 2007, the European Commission requested CEIOPS to provide final, fully consulted advice on Level 2 implementing measures by October 2009 and recommended CEIOPS -(Committee of European Insurance and Occupational Pensions Supervisors)- to develop Level 3 guidance on certain areas to foster supervisory convergence ( )>> (CEIOPS-DOC-50/09, 2009, p. 3). Therefore, CEIOPS, replaced since 1 january 2011 by EIOPA (one of three European Supervisory Authorities), was charged with developing level 2 implementing measures proposals, also on supervisory reporting and public disclosure requirements. In october 2009, after the public consultation period required by the standard procedure for publication of documents, CEIOPS has issued the final advice to European Commission for the reporting and disclosure area. According the advice, insurance undertakings should produce two main documents, which should follow the same structure, to provide information necessary both for supervision purposes and for disclosure requirements, under articles 35 and 51 (DIRECTIVE 2009/138/EC): - Report to Supervisors, which is a private report received by supervisory authority only, to carry out the supervisory review process; - Solvency and Financial Condition Report (SFCR already mentioned), which is a public report through which undertakings disclose information to the public on their solvency and financial condition. As described in the contents and principles of compilation, the SFCR is the document that represents, as close as possible,, the current annual management report and CEIOPS advice provides indications about its: - structure; - contents; - process of reporting and disclosure. About the structure, the document (CEIOPS-DOC-50/09, 2009) illustrates, in a specific table, chapters and paragraphs on which the SFCR should be built, giving the indication of the articles in the directive which each chapter refers to. 11

12 To ensure comparability, to provide sufficiently comprehensive topics and to comply with supervisory purposes, CEIOPS defines the minimum content of the SCFR. The aim is to understand the main characteristics of the business, the performance and the risk profile of the undertaking, the process to ensure the governance requirements are met, the valuation techniques and the assumptions for different items of the balance sheet, the SCR and the MCR, and the amount and structure of own funds (CEIOPS- DOC-50/09, 2009). In order to avoid different interpretations, for each listed risk category (underwriting, market, credit, liquidity, operational and others), CEIOPS identifies the items to be described in terms of risk exposure, concentration, mitigation and sensitivity. For the risk exposure, for example, it is expected to have information on the nature of the measures used to assess the risk within the organization, further information if quantitative data disclosed at the end of the financial year are not representative of the real exposure; moreover, at group level, information should be provided for material group specific risks, as reputation, concentration, strategic risk. Undertakings shall also provide a description of the mitigation practices adopted (for example methodologies of risk transfer as reinsurance arrangements) and the processes followed to monitor the effectiveness of these strategies. About its solvency balance sheet, insurance undertakings are required to provide also the bases and the method of valuation used for assets, liabilities and any qualitative and quantitative major differences with the valuation methods used in the financial statements. For each voice of the financial statements, CEIOPS indicates which information the undertaking should at least provide. It is also important, in order to facilitate comparability for all undertakings and supervisors, to define the process of reporting and disclosure. In this regard, following the advice, CEIOPS identifies four main components of the process, as frequency, internal review, submission dates and format of reporting. With specific reference to the SCFR, article 51 of the directive requires an annual disclosure of the report, which should be approved, according article 55, by the administrative, management or supervisory body of the undertaking. The disclosure should be accompanied by quantitative reporting templates, designed and standardized by CEIOPS (their content will be specified by CEIOPS as a future guidance), which should be approved 12

13 following the same procedure of the SCFR and reported both quarterly and annually. As for the current Italian legislation, all the illustrated requirements are subjected to the proportionality principle, as a general principle that applies throughout the directive and all its implementing measures. In relation to public disclosure, the principle shall be applied to the detail of the information, commensurate with the scale, nature and complexity of the risks of the business (CEIOPS-DOC-24/08). However, it should be noted that proportionality should be applied on a principle base approach: there are no specific indications, both in the directive and in CEIOPS documents, about thresholds or similar criteria, which could be useful to classify scale, nature and complexity of an insurance undertaking risk profile. 13

14 5. CASE STUDIES: CURRENT COMPLIANCE AND PREPARDNESS TO THE FUTURE OF A SIGNIFICANT SAMPLE OF ITALIAN INSURANCE GROUPS With the twofold purpose of verifying the current state of alignment with current rules and the level of preparedness of insurance firms to the entry in force of the Solvency II Directive, a sample of Italian insurance groups has been selected and the related annual report (2009 financial year) connected with the financial statements analyzed. The selected sample consists of: - Generali (Assicurazioni Generali, 2010); - Fondiaria Sai (Gruppo Fondiaria Sai, 2010); - UFG (Unipol Gruppo Finanziario, 2010); - Reale Mutua (Reale Mutua Assicurazioni, 2010); - Cattolica (Gruppo Cattolica, 2010). The five selected groups are Italian multi-branch groups, engaged both in life and non-life insurance business, representing the 44% of the Italian market, according the following market shares (based on the written premium of Italian business) (ANIA, 2010): Figure 1 Incidence of the insurance groups based on written premiums (ANIA source) It could be significant to point out that the representativeness of the sample due to the single non-life component increases up to 61%; differently, for the only life business the value decreases to 36%, because there are some firms that are among the first ten life insurance groups but 14

15 do not exercise non-life business are not Italian groups, so that they have been excluded from the sample (as Poste Vita, Allianz or Axa). According the main requirements that relates to the annual report, the analysis has shown the following results. Regarding the <<( )fair balanced and comprehensive analysis about the position of the undertakings included in the consolidation( )>> (DIRECTIVE 2009/138/EC, art.100) and relations with group undertakings, it is noted that all the groups describe in the introduction the general observed trend and any relations with the undertakings of the group, in particular on new acquisitions or mergers occurred in the previous years. A general description at group level, in the financial and technical context of the 2009 financial year, is provided, together with an illustration of the results contained in the financial statements (with an higher level of detail for two of the five groups Generali and Reale Mutua). About the new requirement of a description of the principal risks and uncertainties, three groups (Generali, Reale Mutua and Cattolica) have developed a specific and detailed section on the risks which the group is exposed to, referring to financial risk management objectives and policies. The illustrations provided seem to be, also, alligned with the Solvency II approach (the description of the risks the terminology and classification used by the directive is adopted). The other groups have described the technical exposures, provided in the insurance market, but without a specific reference to the risk profile or to the policies in place to manage those risks. All the five annual reports, however, illustrate the characteristics of the insurance portfolio of the group, in the author s view, with a high degree of precision and detail, in the description of claims handled and any eventual open litigation procedure, as well as the requested information on the new products placed on the market. Details of provided information are always accompanied by the relevant financial statements and reconciliations: some groups have reported the main result of the financial statement, referring to them for more detail, while others have reported the interested financial statement in full and any reconciliation tables. With reference to the technical aspects of the insurance business, differently from the others, in the author opinion it is less detailed the required description of the reinsurance risk transfer policy adopted: sometimes it is null, probably justified by the fact that it is a risk mitigation techniques partially used by the group (Cattolica); other times it consists, 15

16 instead, in a marginal note of the type of arrangement subscribed, without any consideration or valuation of the relative impact. This aspect, however, has to be worthy of attention, especially from the point of view of future European legislation, because it represents a relevant component of one of the risks (counterparty default risk) classified in the Solvency II directive. Finally, the research has revealed that, in the author s opinion, not all the annual reports contain a detailed description of the foreseeable future management. In fact, while two groups (Generali and Reale Mutua) have shown, based on the general current economic situation, the actions that intend to engage (refererring for example to the products, projects of territorial development of the network, lines of business where increasing their market -even specifying sometimes which firms of the group will be involved), the other have expressed expectations on the outcome of the group for the future year, without specific evidence to support these expectations. This seeming lesser attention, in the author s view, is especially surprising because is not a new requirement in the preparation of the annual report, particularly by insurance groups operating not only on the Italian market, but also in European and international scenario. In this context, planning a path of growth and a likely future possibility of extension of the activities, both in terms of types of business and in terms of geographical distribution of the affairs, therefore, assumes greater importance in the forthcoming European harmonization. 6. CONCLUSIONS The analysis of the legislations has revealed that the Italian national rules have anticipated the development of EU legislation for insurance companies, introducing specific requirements for reporting and disclosure contained both in the directive Solvency II and in the analyzed CEIOPS s advice. This aspect favours -at least from a cultural point of view- Italian companies, for which the new disclosure requirements related to the risk profile will not contain elements of surprise. Consequently, Italian market should be integrated in the European context with an acceptable degree of preparedness and compliance. The study on the Italian groups sample selected has, however, in the author s opinion, expressed not an optimal level of compliance with current 16

17 legislation, with specific reference to certain items which represent the elements of innovation (as description of risks and uncertainties). In this regard, however, it should be considered that 2009 is just the second implementation year of the new national rules; so, the expectation for the future (2010 and 2011 annual reports), thanks also to the activity of supervision and monitoring by ISVAP (the required first-half report), should be of achieving a higher degree of adequacy and compliance with current requirements. A future line of investigation may also involve similar analysis on small companies: as a matter of fact, they represent an equally large market share (if considered from their numerical impact), and could be most unprepared to new legislation. The study of the application of the proportionality principle, in relation to the nature scale and complexity of the business, could be a particular interesting matter of research too. The final hope is therefore that the Italian insurance companies will continue to improve the level of adequacy and conformity of the annual report in view of the entry into force of Solvency II regime. This result will be very important, beyond the purely legal exercise of compliance with the rules, because it will provide all stakeholders a realistic and reliable picture of management, not only with references to past trends and current activities, but especially for future strategies and developments. 17

18 7. REFERENCES Agliata F. (2007) L informazione di bilancio delle imprese di assicurazione nella sua evoluzione. Torino: G. Giappichelli Editore Alvino F. (2001) La comunicazione economico-finanziaria d impresa sul mercato dei capitali. Torino: G.Giappichelli Editore ANIA (2010) Fact-pack mercato danni dicembre testo disponibile al sito 15 aprile 2011 ANIA (2010) Fact-pack mercato vita ottobre testo disponibile al sito 15 aprile 2011 Assicurazioni Generali (2010) Relazione sulla gestione. testo disponibile al sito 15 aprile 2011 BANCA D ITALIA/CONSOB/ISVAP 6 FEBBRAIO 2009, Documento N. 2 (2009) Tavolo di coordinamento fra Banca d'italia, Consob ed Isvap in materia di applicazione degli IAS/IFRS Informazioni da fornire nelle relazioni finanziarie sulla continuità aziendale, sui rischi finanziari, sulle verifiche per riduzione di valore delle attività e sulle incertezze nell utilizzo di stime. testo disponibile al sito 15 aprile 2011 Catturi G. (2009) La redazione del bilancio di esercizio. Secondo la dottrina, la normativa comunitaria, civilistica e fiscale. Milano: Cedam CEIOPS-DOC-24/08 (2008) Advice to the European Commission on the Principle of Proportionality in the Solvency II Framework Directive Proposal. testo disponibile al sito 15 aprile 2011 CEIOPS-DOC-50/09 (2009) CEIOP S Advice for Level 2 Implementing Measures on Solvency II:Supervisory Reporting and Public Disclosure Requirements. testo disponibile al sito 15 aprile 2011 Cattaneo M., Manzonetto P. (1992) Il bilancio d esercizio. Profili teorici e istituzionali negli anni novanta. Milano: Etas libri Coda V.(1991) Comunicazione e imagine nella strategia dell impresa, Torino: G.Giappichelli Editore CODICE CIVILE (2011).Art Relazione sulla gestione. Colombo G.E. (1994) La nota integrativa e la relazione degli amministratori - Consiglio Superiore della Magistratura Quaderni N94, parte I_3. Testo disponibile al sito 28 aprile 2011 CNDCEC Consiglio Nazionale Dei Dottori Commercialisti E Degli Esperti Contabili (2009) La relazione sulla gestione art.2428 codice civile.la relazione sulla gestione dei bilanci d esercizio alla luce delle novità introdotte dal dlgs 32/2007. testo disponibile al sito 15 aprile 2011 Decreto Legislativo 26 maggio 1997, N.173 (1997) Attuazione della direttiva 91/674/CEE in materia di conti annuali e consolidati delle imprese di assicurazione Gazzetta Ufficiale n. 143 del 28 giugno199. Supplemento ordinario n.123. testo disponibile al sito 15 aprile 2011 Decreto Legislativo 7 settembre 2005, N.209 (2005) Codice delle assicurazioni private. Gazzetta Ufficiale n. 239 del 13 ottobre testo disponibile al sito 15 aprile 2011 dlgs 209/2005 Decreto Legislativo 2 febbraio 2007, N.32 (2007) Attuazione della direttiva 2003/51/CE che modifica le direttive 78/660, 83/349, 86/635 e 91/674/CEE relative ai conti annuali e ai 18

19 conti consolidati di taluni tipi di società, delle banche e altri istituti finanziari e delle imprese di assicurazione Gazzetta Ufficiale n. 73 del 28 marzo 2007 (Rettifica G.U. n. 75 del 30 marzo 2007). testo disponibile al sito 15 aprile 2011 dlgs 32/2007 Di Cagno N., Adamo S. (1994) L economia delle aziende di assicurazione. Amministrazione e controllo. Torino: G.Giappichelli Editore DIRECTIVE 2003/51/EC (2003) of the European Parliament and of the Council of 18 June 2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings). Official Journal of the European Union 17 July testo disponibile al sito 15 aprile 2011 DIRECTIVE 2009/138/EC (2009) of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II). Official Journal of the European Union vol December testo disponibile al sito 15 aprile 2011 Gismondi F., Di Gregorio T., Curti G., (1999) Il bilancio delle imprese di assicurazione: principi contabili nel mercato assicurativo dell'ue., moderni approcci alla valutazione del rischio in campo assicurativo, prefazione di Alfonso Desiata. Milano: Il Sole-24 ore PricewaterhouseCoopers Gruppo Cattolica (2010) Relazione sulla gestione. testo disponibile al sito 15 aprile 2011 Gruppo Cattolica (2010) Comunicato stampa. approvati i risultati al 30 settembre Novembre testo disponibile al sito 15 aprile 2011 Gruppo Fondiaria Sai (2010) Relazione sulla gestione al 31 dicembre testo disponibile al sito 15 aprile 2011 Legge 12 agosto 1982, N. 586 Riforma della vigilanza sulle assicurazioni ). testo disponibile al sito 30 aprile 2011 L. 586/1982 IRDCEC Istituto Di Ricerca Dei Dottori Commercialisti E Degli Esperti Contabili (2008) Documento n. 1 La relazione sulla gestione. Alcune considerazioni. testo disponibile al sito 15 aprile 2011 ISVAP 13 LUGLIO 2007, REGOLAMENTO N.7 (2007) Regolamento concernente gli schemi per il bilancio delle imprese di assicurazione e di riassicurazione che sono tenute all'adozione dei principi contabili internazionali di cui al titolo viii (bilancio e scritture contabili), capo i (disposizioni generali sul bilancio), capo ii (bilancio di esercizio), capo iii (bilancio consolidato) e capo v (revisione contabile) del decreto legislativo 7 settembre 2005, n. 209 codice delle assicurazioni private. Modificato dal provvedimento isvap n dell 8 marzo Gazzetta Ufficiale n. 175 del 30 luglio testo disponibile al sito 15 aprile 2011 ISVAP 4 APRILE 2008, REGOLAMENTO N.22 (2008) Regolamento concernente le disposizioni e gli schemi per la redazione del bilancio di esercizio e della relazione semestrale delle imprese di assicurazione e di riassicurazione di cui al titolo viii (bilancio e scritture contabili) capo i (disposizioni generali sul bilancio), capo ii (bilancio di esercizio) e capo v (revisione contabile) del decreto legislativo 7 settembre 2005, n. 209 codice delle assicurazioni private. Modificato ed integrato dal provvedimento isvap del 29 gennaio 2010 n e dal provvedimento isvap del 17 novembre 2010 n Gazzetta Ufficiale n. 106 del 29 aprile testo disponibile al sito 15 aprile 2011 Lusvarghi V. (1990) La gestione dell impresa di assicurazione. Padova Cedam 19

20 Marasco V. (1988) L informazione finanziaria delle società. Bilanci Prospetti informativi Relazioni infrannuali Controlli CONSOB Certificazione. Milano: Ipsoa Informatica Ottaviani G. (1981) L impresa di assicurazione. Milano: Giuffrè Reale Mutua Assicurazioni (2010) Relazione sulla gestione al 31 dicembre testo disponibile al sito 15 aprile 2011 Reale Mutua Assicurazioni (2010) Comunicato stampa. Approvato il bilancio 2009 della Societa Reale Mutua di Assicurazioni e presentato il consolidato di gruppo. aprile 2010 testo disponibile al sito 15 aprile 2011 Reali F. (1999) Il ruolo del bilancio nel XX secolo. L evoluzione della trasparenza contabile e le implicazioni di contabilità internazionale. Padova: Cedam Unipol Gruppo Finanziario (2010) Relazione sulla gestione. testo disponibile al sito 15 aprile