Recently, the ‘Three Lines Model’ has come under scrutiny and criticism as to whether it remains fit for purpose for financial institutions, against the background of today’s business environment and risk landscape. New technologies such [...]
In recognition of the fact that a sound capital and supervisory framework for the insurance sector is essential for supporting financial stability and protecting policyholders, IAIS committed to develop a risk-based global Insurance Capital Standard [...]
Solvency II - Tax? Not my cup of tea! The reality is, that under Solvency II taxes do concern every insurance undertaking, since (deferred) taxes can have a significant impact on the Solvency Capital Requirements [...]
In recent years, there have been substantial changes in the approach to supervision of insurance groups. There has been much debate on group capital requirements and risk management and reporting obligations. However, group supervision is [...]
The International Association of Insurance Supervisors (IAIS) is participating in a global initiative, with the Financial Stability Board (FSB) and the G20, to identify potential global systemically important insurers (G-SIIs). As part of this initiative, the IAIS has issued a public consultation on proposed measures to identify any insurers whose distress or disorderly failure, because of their size, complexity and interconnectedness, would cause significant disruption to the global financial system and economic activity. The CRO Forum responded to the IAIS draft policy measures. This paper provides some additional background to the response provided.
Towers Watson published a paper on the matching adjustment and the implications for long-term savings with financial support from the CRO Forum.
The CRO Forum believes that the liquidity premium is a fundamental part of the economic valuation of insurance contracts. We support the underlying principles agreed by the Task Force, and the formulaic approach for deriving the liquidity premium adopted in QIS5.
In this paper we discuss the idea behind currency risk. If the guidance for the required capital calculation for FX risk is based on a shock applied to the Net Asset Value of the entities in their respective reporting currencies, then this can create hedge incentives that endanger the solvency of the group and hence policyholder benefits.
In this press release, Representatives of the European insurance industry have urged the European Commissioner for the Internal Market and Services, Michel Barnier, to ensure that the overly conservative and prescriptive elements still contained in the draft implementing measures for the forthcoming EU regulatory regime, Solvency II, are urgently addressed.
At the heart of the issue is the complexity of the way deferred tax items are recognized, coupled with all the complexities of a market consistent valuation regime. This combined complexity and uncertainty manifests itself in a conservative assessment of the value of tax and the role it plays in a valuation system.
