On the Measurement of Solvency of Insurance Companies: Recent Developments that will Alter Methods Adopted in Emerging Markets
Solvency-both as an economic requirement in the market and as a regulatory and supervisory tool-is critical to all insurance markets. Current market conditions, coupled with expected institutional changes, will place particular burdens on emerging...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/02/2953735/measurement-solvency-insurance-companies-recent-developments-alter-methods-adopted-emerging-markets http://hdl.handle.net/10986/14209 |
| Summary: | Solvency-both as an economic requirement
in the market and as a regulatory and supervisory tool-is
critical to all insurance markets. Current market
conditions, coupled with expected institutional changes,
will place particular burdens on emerging and developing
markets. Institutional solvency, effective risk management
within companies, effective supervisory oversight, and the
development of market disciplines are all linked. The author
proposes that the effective implementation of the emerging
regime needs a careful and diligent phased process of
capacity-building. The first priorities are identified as a
strong supervisor, a basic solvency margin requirement, and
the initiation of efforts to gather appropriate data sets.
This can be followed by advancing development of more
sophisticated solvency regulation, increased use of
technical expertise, and increased use of market disciplines
as the community and financial markets become more able to
exercise such discipline. |
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