Risk Based Supervision
The role of supervisory authorities undertaking prudential supervision is to promote the maintenance of efficient, fair, safe and stable insurance markets for the benefit and protection of policyholders. An effective supervisory authority is able t...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/807661468177834997/Risk-based-supervision http://hdl.handle.net/10986/27499 |
| Summary: | The role of supervisory authorities
undertaking prudential supervision is to promote the
maintenance of efficient, fair, safe and stable insurance
markets for the benefit and protection of policyholders. An
effective supervisory authority is able to require an
insurer to take timely preventive and corrective measures if
the insurer fails to operate in a manner that is consistent
with sound business practices or regulatory requirements.
Traditionally, authorities have performed this role by way
of compliance based supervision. Under this style of
supervision, insurers must comply with a set of prudential
rules generally written into the law or the subordinate
legislation. The role of the supervisory authority is to
ensure that insurers do, in fact, comply with these rules.
In recent years, supervision has been evolving and moving
from a style that is compliance based to one that is risk
based. This progression has also been a feature of the
activities of bank supervision and pension supervision. |
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