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Business and Economics > Insurance

You are looking at 1 - 10 of 17 items for :

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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 Global Financial Stability Notes
Private Equity and Life Insurers
Fabio Cortes
,
Mohamed Diaby
, and
Peter Windsor
This Global Financial Stability Note studies the growing trend of private equity (PE) investments into the life insurance industry. PE companies’ investments in life insurers are integral to their strategic growth as PE firms evolve beyond the traditional leveraged buyout transaction to acquire diverse businesses across private credit, structured credit, private real estate funds, and private infrastructure funds. This note reviews the growth in PE investments through the lens of the diverse acquisition incentives and strategies, the consequent changes to asset allocation and investment strategies of the acquired life businesses, and potential prudential and policy implications.
Keywords:
private equity; life insurance; leveraged buyout transaction; private credit; structured credit; private real estate funds; private infrastructure funds; life insurer; private equity company; life insurance insurance company; PE company; IMF Library; Global Financial stability note; Insurance companies; Insurance; Credit; Financial statements; Asset allocation; Global
Cover IMF Staff Country Reports
United States: Financial Sector Assessment Program-Technical Note-Insurance Supervision and Regulation
International Monetary Fund. Monetary and Capital Markets Department
This Technical Note (TN) is a targeted review of cross-cutting themes building on the detailed assessment of the Insurance Core Principles (ICPs) conducted in 2015. The targeted review was chosen, in part, due to the performance of the U.S. insurance regulatory system in the 2015 detailed assessment where it was assessed that the U.S. observed 8 ICPs, largely observed 13 ICPs and partly observed 5 ICPs. The analysis relied on a targeted self-assessment against a subset of ICPs covering valuation and solvency, risk management, conduct, winding-up, corporate governance and enforcement, and the objectives, powers and responsibility of supervisors. The choice of subjects covered in this review is based on those aspects most significant to financial stability and a follow-up on key recommendations from the 2015 detailed assessment. The focus of the analysis has been on the state-based system of regulation and supervision, reflecting the existing institutional setup.
Keywords:
ISCR; CR; insurance regulator; holding company; life insurance; risk management; balance sheet; financial condition; State insurance act; state insurance department; State insurance regulator; State regulator; federal government; Insurance companies; Insurance; Natural disasters; Financial statements; Solvency; 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 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
New Zealand: Financial Sector Assessment Program: Detailed Assessment of Observance-Insurance Core Principles
International Monetary Fund. Monetary and Capital Markets Department
This paper presents an assessment of the Observance of Insurance Core Principles in New Zealand. Observance of these principles in New Zealand falls significantly short. In some areas, the implementation of initiatives that would improve observance is incomplete. Supervisory risk assessment and enhancement of regulatory reporting by insurers are limited, which compromises effective off-site supervision, macroprudential analysis, and publication of aggregate information on the market. The Reserve Bank of New Zealand should focus in regulation and supervisory work on setting standards on corporate governance, risk management, and internal controls. It should assess risk in these areas to promote the effectiveness of insurers’ governance.
Keywords:
ISCR; CR; life insurer; risk management; life insurance; solvency standard; insurance sector; insurance broker; Insurance companies; Insurance; Solvency; Anti-money laundering and combating the financing of terrorism (AML/CFT); Financial statements; Australia and New Zealand
Cover IMF Staff Country Reports
Germany: Financial Sector Assessment Program-Insurance Sector Supervision-Technical Notes
International Monetary Fund. Monetary and Capital Markets Department
This paper provides an update on the German insurance sector and an analysis of certain key aspects of the regulatory and supervisory regime. It includes an analysis of German practice in relation to selected Insurance Core Principles in the context of a wider discussion of key issues in regulation and supervision. This technical note focuses mainly on recent developments in the sector and key vulnerabilities, including life insurance issues, those vulnerabilities associated with the continuing low interest rate environment; the preparations of the authorities and industry for the implementation of the Solvency II requirements; and the supervisory approach to large insurance groups.
Keywords:
ISCR; CR; Solvency II; insurance group; approach to group supervision; fixed income; parent company; supervisory view; ZZR requirement; Solvency II implementation; company level; business organization; reinsurance company; Solvency II requirement; companies' position; Solvency II SCR; a number of company; risk assessment; Insurance companies; Solvency; Insurance; Accounting standards; Global systemically important insurers; Global
Cover Balance of Payments Manual, Sixth Edition Compilation Guide
Balance of Payments Manual, Sixth Edition Compilation Guide
Mr. Eduardo Valdivia-Velarde
and
Ms. Tamara Razin

Abstract

The Balance of Payments and International Investment Position Manual 6: Compilation Guide is a companion document to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). The purpose of the Guide is to show how the conceptual framework described in the BPM6 may be implemented in practice and to provide practical advice on source data and methodologies for compiling statistics on the balance of payments and the international investment position. The Guide is not intended to be a stand-alone manual, and readers should be familiar with the BPM6.

Keywords:
M&G; economy; transaction; goods; enterprise survey; net acquisition; investment fund; balance of payments; financing transaction; incurrence of liability; Foreign direct investment; Income; Securities; Insurance; Currencies; Global; Africa; net incurrence; acquisition of financial assets; Financial account
Cover IMF Staff Country Reports
Switzerland: Detailed Assessment of Observance-Insurance Core Principles
International Monetary Fund. Monetary and Capital Markets Department
This Detailed Assessment of Observance on the Insurance Core Principles on Switzerland analyzes that the insurance industry in Switzerland is well developed having among the highest insurance penetration and expenditure per capita in the world. The sector is dominated by a few players writing significant international business. The life sector is dominated by two players, responsible for 54 percent of the business and the top 10 life insurers account for 97 percent of the market. The industry has weathered the 2008 crisis well; however, the current low interest rate environment is affecting the sector. The lack of availability of Swiss government bonds to match long term liabilities of life insurers and pension funds could be a source of vulnerability. The long-term nature of the liabilities of life insurers and pension funds could in principle be matched by investment in Swiss government securities. Supervision focuses on ensuring sufficiency of liquid assets to meet policy liabilities. Policyholders have priority claims over the tied assets. In addition, robust solvency requirements ensure there is enough capital to safeguard the insurers’ financial soundness under adverse conditions.
Keywords:
ISCR; CR; financial market; risk management; parent company; insurance group; board of directors; business plan; investment strategy; balance sheet; insurance coverage; Insurance companies; Insurance; Solvency; Financial statements; Insurance supervision; Global; Europe
Cover IMF Staff Country Reports
Canada: Financial Sector Assessment Program-Impact on the Insurance Sector of a Low Interest Rate Environment-Technical Note
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses Canada’s Financial Sector Assessment Program (FSAP) impact on the insurance sector of a low interest rate environment. It highlights that actuarial standards on valuation of liabilities require that assumed reinvestment rates take increasing account of current market rates that led to higher liabilities as low rates persisted. The note outlines the effect of Canadian accounting and actuarial standards that further increases in liabilities need to be recognized in the short term. Policy measures have been undertaken by Office of the Superintendent of Financial Institutions (OSFI) in the banking sector to address broader risks.
Keywords:
ISCR; CR; firm; interest rate; return; product; life company; company report; rate change; reinvestment rate; companies' market shares; design regulation; companies' inability; interest rate scenario; company's liability; wealth management products; Insurance; Insurance companies; Personal income; Accounting standards; Capital adequacy requirements; Europe; North America; Asia and Pacific; Global