Pillar 3 is concerned with enhancing disclosure requirements in order to increase market transparency. It will aim to harmonise reporting but goes beyond the notion of well-defined financial reporting rules and increases market transparency, providing a clear insight into the actual risk and return profile of an insurance company. Companies must interpret the disclosure requirements, develop a strategy for disclosure and educate key stakeholders on the potential impact. The onus is placed on firms to design the information which through public disclosure will be available to regulators, analysts, rating agencies and shareholders alike. Crucially, organisations must also develop the internal processes and systems to produce these reports.

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