The European Insurance and Occupational Pensions Authority (EIOPA) has chosen XBRL International as the uniform format for Solvency II insurance reporting across Europe.
XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is becoming a standard means of communicating information between businesses and on the internet.
XBRL is quickly becoming the “de facto” reporting data format for insurance regulation around the world.
XBRL is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world.
It provides major benefits in the preparation, analysis and communication of business information.
It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.
XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies.
It is an open standard, free of license fees.
It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world.
The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag.
The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison.
Computers can treat XBRL data "intelligently": they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users.
XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.
Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information.
Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format.
XBRL can handle data in different languages and accounting standards.
It can flexibly be adapted to meet different requirements and uses.
Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.
Data Collection and Reporting
By using XBRL, companies and other producers of financial data and business reports can automate the processes of data collection.
For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently if the sources of information have been upgraded to using XBRL.
Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort.
A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders.
Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy.
Small businesses can benefit alongside large ones by standardising and simplifying their assembly and filing of information to the authorities.
Data Consumption and Analysis
Users of data which is received electronically in XBRL can automate its handling, cutting out time-consuming and costly collation and re-entry of information.
Software can also immediately validate the data, highlighting errors and gaps which can immediately be addressed.
It can also help in analysing, selecting, and processing the data for re-use.
Human effort can switch to higher, more value-added aspects of analysis, review, reporting and decision-making.
In this way, investment analysts can save effort, greatly simplify the selection and comparison of data, and deepen their company analysis.
Lenders can save costs and speed up their dealings with borrowers.
Regulators and government departments can assemble, validate and review data much more efficiently and usefully than they have hitherto been able to do.
The Solvency ii Association is the largest Association of Solvency II professionals in the world - http://www.solvency-ii-association.com.
George Lekatis is the General Manager and Chief Compliance Consultant of Compliance LLC, a leading provider of risk and compliance training and executive coaching in 36 countries.
George has more than 17,000 hours experience as a professional speaker and seminar leader. He has worked for more than 15 years as a management consultant and educator and has demonstrated exceptional presentation and communication skills.
George is the president of the Basel ii Compliance Professionals Association (BCPA, www.basel-ii-association.com), the largest association of Basel ii professionals in the world, the Basel iii Compliance Professionals Association (BiiiCPA, www.basel-iii-association.com), the largest association of Basel iii professionals in the world, the Sarbanes Oxley Compliance Professionals Association (SOXCPA, www.sarbanes-oxley-association.com), the largest Association of Sarbanes Oxley professionals in the world, and the Solvency II Association (www.solvency-ii-association.com), which is also the largest Association of Solvency II professionals in the world.
George is an expert witness, qualified to investigate and testify about risk and compliance management standards, policies, procedures, best practices, due care and due diligence.
President of the Solvency ii Association
General Manager and Chief Compliance Consultant, Compliance LLC
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