Insurance Regulation Solvency II

This course looks at:

Current solvency framework

• Main risks for insurers
• Overview of insurance companies supervision
• Determination of available solvency
• Similarities and differences with bank capital
• Tier 1 and Tier 2
• Including future profits in total solvency margin
• Determination of required solvency margin
• Non-life vs. life insurance
• Benefit of reinsurance
• Limitations of current regime

Alternative current Risk-Based Capital (RBC) models

• The American RBC approach
• S&P capital adequacy ratio model
• Gross and net total adjusted capital
• Capital charges and capital requirements for investment, insurance and other risks
• Capital Adequacy Ratio (CAR) and hard CAR
• Review of new S&P model
• FSA regulation in UK: enhanced capital requirements for insurance

Solvency II project

• Ongoing project led by European supervisors (CEIOPS): expected implementation
• Cover of insurance technical risk, market risk, credit risk, operational risk and asset-liability mismatch risk
• Statistical valuation of technical provisions (risk margins and confidence intervals)
• Solvency capital requirement vs. minimum capital requirement
• Use of internal models to promote better risk management

Financial groups directive

• Elimination of double leverage
• Impact on financial groups