Insurance Supervision: From Solvency I to Solvency II
Introduction
Risk Management
Financial Economics of Insurance
Underwriting Risks: Life Risk and Non-life Risk
Investment Risks: Market, Credit and Liquidity Risk
Non-financial Risks: Operational and Business Risk
The Financial Crisis: Consequences for Insurers
Insurance Supervision: From Solvency I to Solvency II
Insurance Supervision Outside the EU
Pillar I of Solvency II
Pillar II of Solvency II
Pillar III of Solvency II
Accounting Regulations
Banking Supervision: From Basel I to III
Management Control
Organising Risk Management
Bringing All the Strands Together
This chapter will describe the regulatory framework for the insurance industry that has been in force in Europe since the 1970s, a framework that has become outdated for a number of reasons. Ultimately, Solvency II is expected to redesign the European framework for insurance supervision, as will be discussed at the end of this chapter. The chapter discusses the background and context of Solvency II, while later chapters will discuss its detailed content.
WHERE DO WE COME FROM?
As discussed in Chapter 3, the objective of insurance supervision is to safeguard the stakes of the policyholders. After all, it is more effective and efficient if one delegated, well-equipped agency is able to monitor the behaviour and financial soundness of insurance companies.
There are basically four classes of supervisory systems. The disclosure system requires companies to publish all relevant information in order for individual policyholders to assess the soundness of companies themselves. We will see later in this chapter that the Solvency II framework includes parts of this philosophy, but aims mostly at the market discipline coming from investors rather than policyholders. The normative
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net