Insurers have been advised to adopt a five-point plan to get ready for Solvency II, which goes live on 1 January 2016.
Process management firm Accountagility said the five measures were based on challenges faced by companies when working on data processing and financial reporting.
It said in order to comply with Solvency II, insurers must be able to demonstrate "their data is reliable, controlled and accurate".
The five measures are:
1. Deciding which data is required. It said data would be "the crux" of Solvency II compliance and firms should decide on this and agree how it could be sourced and collated accurately.
2. Develop a prototype in processing. The firm said insurers should focus on just one aspect of their Solvency II preparation and "get that piece up and running smoothly". Once the sample is working on a small scale, it can then be built out and replicated going forward.
3. Firms should also record any manual adjustments from the prototype and ensure unwanted additions are not carried over into the larger replication. The firm said these recordings must show the origins of any figure could be identified and "traced back to the source".
4. Firms are advised to implement regular reviews and identify any issues "at the earliest possible opportunity". It added these could act as "early warning signs" and any checks would ensure problems could be rectified quickly.
5. Demonstrate the process. To prove the system is accurate, firms should be able to trace the process "from start-to-finish" and obtain a clear explanation of any anomalies.
Robert Gothan, CEO and Founder at Accountagility, said: "The clock is ticking towards the Solvency II deadline, yet a lack of understanding surrounding the necessary computations remains a fundamental problem for many firms.
"A transparent and traceable process, supported by regular testing, will ultimately be the best way for firms to ensure that they are in the best position to fulfil their Solvency II requirements in time."
