BaFin has been unable to increase the number of on-site inspections of insurance companies

While this has been compensated for to some extent by other activities, such as meetings
with board members and short visits to institutions, BaFin is encouraged to follow
through with its plans to double the number of on-site inspections. The Solvency II
preparations have also resulted in most on-site inspections focusing primarily on the
readiness of insurance companies’ internal models, including risk management
requirements.

Although understandable, this has meant that various other key risk
areas of insurance companies – such as those related to information technology, new
investments, products and activities – have received relatively less attention. BaFin
should identify the key risk areas of insurers based on its new risk classification
approach and use them to determine its on-site inspection programme.