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Business and Economics > Insurance

You are looking at 1 - 10 of 20 items for :

  • Type: Journal Issue x
  • Banks and banking; State supervision x
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Cover IMF Working Papers
Implementing Risk-Based Solvency for Insurers—Lessons from Kenya, Mexico, and South Africa
Peter Windsor
,
Suzette J Vogelsang
,
Christiaan Henning
,
Kerwin Martin
,
Elias Omondi
,
Gerardo Rubio
, and
Jooste Steynberg
International standards and best practice supports the implementation of a risk-based solvency regime in the regulation and supervision of insurers. Several emerging market and developing economies are transitioning to such a solvency regime or planning to do so. This paper discusses Kenya, Mexico, and South Africa’s journey to putting in place a risk-based solvency regime which had several common elements notwithstanding significantly different insurance sectors. The transition was a multi-year project requiring dedicated additional resources; restructuring of the regulator, including redesigning supervisory processes and tools and upgrading information technology systems; and significantly greater coordination between the regulator and the insurance industry.
Keywords:
Insurance; Risk-based Solvency; Risk-based supervision; solvency regime; Penetration rate; RBS project; solvency assessment; RBS implementation; supervision of insurer; Insurance companies; Solvency; Financial statements; Africa; Global
Cover IMF Working Papers
Accounting Standards and Insurer Solvency Assessment
Peter Windsor
,
Jeffery Yong
, and
Michelle Chong-Tai Bell
The paper explores the use of accounting standards for insurer solvency assessment in the context of the implementation of IFRS 17. The paper is based on the results of a survey of 20 insurance supervisors. Overall, IFRS 17 is a welcome development but there will be challenges of implementation. Not many insurance supervisors currently intend to use IFRS 17 as a basis for solvency assessment of insurers. Perceived shortcomings can be overcome by supervisors providing clear specifications where the principles-based standard allows a range of approaches. Accounting standards can provide a ready-made valuation framework for supervisors developing new solvency frameworks.
Keywords:
WP; insurance contract; insurance supervisor; impact study; insurance liability; measurement approach; solvency position; Insurers; Supervisors; IFRS; IFRS 17; Solvency; Capital; Supervision; accounting practice; International Financial Reporting Standards; Insurance companies; Accounting standards; Insurance; Global; Africa
Cover IMF Staff Country Reports
France: Financial Sector Assessment Program-Technical Note-Risk Analysis of Banking and Insurance Sector
International Monetary Fund. Monetary and Capital Markets Department
This technical note presents risk analysis of banking and insurance sector in France. The assessment is based on stress tests, which simulate the health of banks, insurers under severe yet plausible (counterfactual) adverse scenarios. The stress tests reveal that banks and insurers would be resilient against simulated shocks, although some challenges remain. French banks have improved their capitalization and asset quality; however, profitability remains challenged. The report also highlights that profitability is pressured on both the income and expense sides. Banks’ ability to generate higher interest income is constrained by persistently low interest rates, and market businesses including trading activities have contracted in recent years. Growth-at-risk (GaR) analysis shows that the biggest contributing factors to the risk of growth are cost of funding and stock market prices. Financial conditions continue to tighten gradually since mid-2017; though the overall conditions remain accommodative. Risks stemming from loans to households seem to be contained over the short- to medium-term horizon, given relatively strong households’ balance sheets, no evidence of significant misalignment in house prices, social safety nets, and fixed interest rates.
Keywords:
ISCR; CR; BNP Paribas; Crédit Agricole; risk tolerance; cash flow; central bank; balance sheet; interest rate; Stress testing; Insurance companies; Liquidity risk; Insurance; Liquidity; Global
Cover IMF Staff Country Reports
France: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This Financial System Stability Assessment paper on France provides summary of an assessment of the financial system. Dominated by internationally active financial conglomerates, the French financial system has made important progress since the last financial stability assessment program (FSAP). In order to address a build-up of systemic risks, the authorities have proactively used macroprudential measures and public communication. The government is pursuing a strategy to prepare Paris as a key financial hub, including by promoting crypto-assets, fintech, green finance, and market entry. Banking and insurance business lines, and the corporate sector, carry important financial vulnerabilities that need close attention. The FSAP thus has recommended augmenting policy tools to contain vulnerabilities and continue to act pre-emptively if systemic risks intensify. In order to mitigate intensification of corporate—and potentially household—vulnerabilities, the FSAP proposed: active engagement with the European Central Bank on the possible use of bank-specific measures; considering fiscal measures to incentivize corporates to finance through equity rather than debt; and a sectoral systemic risk buffer.
Keywords:
ISCR; CR; asset; return on equity; bank; financial system; U.S. dollar; debt service; real GDP; monetary policy; banking sector; asset quality; Insurance companies; Insurance; Stress testing; Financial statements; Liquidity requirements; Global
Cover IMF Staff Country Reports
Uganda: Technical Assistance Report-Moving Towards Risk-Based Supervision of Insurance in Uganda: Training on Supervision of Reinsurance and Assisting on an Industry Seminar on Risk-Based Supervision
International Monetary Fund. Monetary and Capital Markets Department
This Technical Assistance Report discusses the recommendations made by the IMF mission to assist Uganda in moving toward risk-based supervision of insurance sector. It highlights that under the revised insurance legislation, the Insurance Regulatory Authority of Uganda (IRA) will be requiring nonlife insurers to provide certification for adequacy of technical provisions by an actuary as is currently required for life insurers. When the requirement comes into effect, it will be necessary for it to be supported by guidance from IRA in terms of its expectations for the actuarial reports to be filed. This will ensure consistency in reporting to the IRA and that the reports will provide the information needed by the IRA for supervisory purposes.
Keywords:
ISCR; CR; reinsurance; IRA supervision manager; premium; net premium; Uganda insurance market; life insurance insurance premium; reinsurance training; staff of IRA; IRA team; industry IRA Board; Risk-based supervision; Insurance; Insurance companies; Global
Cover IMF Staff Country Reports
Canada: Report on the Observance of Standards and Codes
International Monetary Fund. Western Hemisphere Dept.
This paper discusses key findings of the Report on the Observance of Standards and Codes for Canada. Canada has a very high level of compliance with the Basel Core Principles for Effective Banking Supervision. In response to the challenges and structure of its market, the Canadian banking supervisor (OSFI) has developed and is a strong proponent of risk-based, proportionate, supervisory practices and applies a “close touch” approach to its supervised entities. The supervisory approach is well structured, forward looking and maintained on as dynamic a basis as possible. Entry to the Canadian market is subject to demanding prudential entry standards.
Keywords:
ISCR; CR; holding company; risk management; due diligence; OSFI supervisor; securities regulator; financial market; hedge fund; Insurance companies; Securities; Insurance; Legal support in revenue administration; Basel Core Principles; Global
Cover IMF Staff Country Reports
Israel: Report on the Observance of Standards and Codes
International Monetary Fund
Israel’s Report on Standards and Codes for the financial sector is presented. The authorities take a proactive approach to supervision and correcting incipient problems, and regulations are generally up to date. The assessment of implementation of the Basel Core Principles for Effective Banking Supervision has been conducted in November 2011 within the framework of the Financial Sector Assessment Program Update for Israel. The Bank of Israel and specifically its Banking Supervision Department headed by the Supervisor of Banks is responsible for prudential oversight of banks.
Keywords:
ISCR; CR; central bank; clearing house; credit risk; risk assessment; active market; capital base; internal auditor; risk management; interbank market; insider trading; Insurance companies; Payment systems; Insurance; Legal support in revenue administration; Bank supervision; Global
Cover IMF Working Papers
Possible Unintended Consequences of Basel III and Solvency II
International Monetary Fund
In today's financial system, complex financial institutions are connected through an opaque network of financial exposures. These connections contribute to financial deepening and greater savings allocation efficiency, but are also unstable channels of contagion. Basel III and Solvency II should improve the stability of these connections, but could have unintended consequences for cost of capital, funding patterns, interconnectedness, and risk migration.
Keywords:
WP; balance sheet; capital requirement; equity capital; credit risk; Basel III; Solvency II; Cost of Capital; Funding; Interconnectedness; fair value; bank assets; preference shares; conservation buffer; bail-in capital proposal; holding company; unsecured debt; Insurance companies; Solvency; Insurance; Financial statements; Europe; Global
Cover IMF Staff Country Reports
United States: Publication of Financial Sector Assessment Program Documentation: Reports on Observance and Codes
International Monetary Fund
The report gives a summary of the detailed assessment report on the implementation of the Basel Core Principles for Effective Banking in the United States and its recommendations, securities and futures market regulatory, insurance regulation, Fixed Income Clearing Corporation -Government Securities Division (FICC-GSD) system, and other recommendations such as Depository Trust Company (DTC) against the Recommendations for Securities Settlement Systems (RSSS), the National Securities Clearing Corporation (NSCC) against the Recommendation for Central Counterparties (RCCP), the Fedwire Securities Service (FSS) against the Committee on Payment and Settlement Systems -International Organization of Securities Commission (CPSS-IOSCO) RSSSs as well. The U.S. authorities welcomed the Financial Sector Assessment Program (FSAP) and independent reviews, and appreciated significant undertaking associated with reviews in the wake of the crisis.
Keywords:
ISCR; CR; authority; Fixed Income Clearing Corporation-Government Securities Division; fund; governance arrangement; default procedure; NSCC business continuity arrangement; FSS participation requirements; FICC-GSD business continuity arrangement; business continuity arrangement; Securities; Insurance companies; Insurance; Central counterparty clearing house; Global
Cover IMF Staff Country Reports
Jersey: Financial Sector Assessment Program Update: Detailed Assessment of Observance of the Insurance Core Principles
International Monetary Fund
This report presents a Detailed Assessment of the Observance of the Insurance Core Principles Report on Jersey. Other than the international business, most cover is obtained from insurers based overseas by the large insurance broker community on the island. There is no ombudsman and no policyholder compensation arrangements for insurance business on the island. Jersey has its own company’s legislation, but has no local accounting or actuarial standard-setting bodies and it looks to other jurisdictions, especially the United Kingdom, for its framework of accounting, auditing, and actuarial standards.
Keywords:
ISCR; CR; insurance code; insurance business; JFSC staff; category B firm; risk model; portfolio transfer; Jersey insurance market; solvency requirement; supervisory authority; business permit; risk assessment; life insurer; JFSC supervision; Insurance companies; Insurance; Solvency; Anti-money laundering and combating the financing of terrorism (AML/CFT); Insurance Core Principles; Africa; Global