IDEAS home Printed from https://ideas.repec.org/p/oec/dafaad/30-en.html
   My bibliography  Save this paper

The Effect of Solvency Regulations and Accounting Standards on Long-Term Investing: Implications for Insurers and Pension Funds

Author

Listed:
  • Clara Severinson

    (OECD)

  • Juan Yermo

    (OECD)

Abstract

This report reviews recent as well as planned changes to accounting and solvency regulations affecting insurers and pension funds and how they may impact long-term investing by these institutions. The review of existing evidence focuses mainly on the impact of risk-based solvency requirements, identifying instances where such regulations may have driven changes in investment strategies and potentially led to pro-cyclical investment behaviour such as the fire-sale of assets in market downturns. The report concludes with a note of caution regarding the application of strict fair value and risk-based solvency rules. Les effets des normes prudentielles et comptables sur l'investissement à long terme : conséquences pour les assureurs et les fonds de pensions Ce rapport passe en revue les modifications récentes et à venir des règles prudentielles et comptables applicables aux assureurs et aux fonds de pension, ainsi que leur impact sur les stratégies d’investissement à long terme de ces institutions. L’examen des données factuelles porte principalement sur l’impact des exigences de solvabilité fondées sur les risques, met en lumière les cas où ces règles ont pu se traduire par un ajustement des stratégies d’investissement, et potentiellement déboucher sur des comportements d’investissement procycliques, comme le bradage des actifs en période de baisse des marchés. Le rapport conclut en mettant en garde contre une application trop stricte des règles prudentielles basées sur les risques et du principe de la juste valeur.

Suggested Citation

  • Clara Severinson & Juan Yermo, 2012. "The Effect of Solvency Regulations and Accounting Standards on Long-Term Investing: Implications for Insurers and Pension Funds," OECD Working Papers on Finance, Insurance and Private Pensions 30, OECD Publishing.
  • Handle: RePEc:oec:dafaad:30-en
    DOI: 10.1787/5k8xd1nm3d9n-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/5k8xd1nm3d9n-en
    Download Restriction: no

    File URL: https://libkey.io/10.1787/5k8xd1nm3d9n-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boon, L.N. & Brière, M. & Rigot, S., 2018. "Regulation and pension fund risk-taking," Journal of International Money and Finance, Elsevier, vol. 84(C), pages 23-41.
    2. Nadine Gatzert & Thomas Kosub, 2014. "Insurers’ Investment in Infrastructure: Overview and Treatment under Solvency II," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 39(2), pages 351-372, April.
    3. Cano, Carlos & Carrasco, Bryan, 2015. "El comportamiento procíclico de los inversores institucionales," Revista Moneda, Banco Central de Reserva del Perú, issue 161, pages 34-38.
    4. Michael Heinrich & Thomas Schreck, 2017. "Effects of Solvency II on Portfolio Efficiency, The Case of Real Estate and Infrastructure Investments," LARES lares_2017_paper_8, Latin American Real Estate Society (LARES).
    5. Inderst, Georg, 2013. "Private infrastructure finance and investment in Europe," EIB Working Papers 2013/02, European Investment Bank (EIB).
    6. Kok, Christoffer & Amzallag, Adrien & Kapp, Daniel, 2014. "The impact of regulating occupational pensions in Europe on investment and financial stability," Occasional Paper Series 154, European Central Bank.
    7. Wouter Thierie & Lieven Moor, 2016. "The characteristics of infrastructure as an investment class," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(3), pages 277-297, August.

    More about this item

    Keywords

    accounting; assureur; comptabilité; defined benefit; economic value; fair value; financement; fonds de pension; funding; insurer; investissement à long terme; juste valeur; long-term investing; pension fund; prestations définies; solvabilité; solvency; valeur économique;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:dafaad:30-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/caoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.