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Own Funds Under Solvency Regime

Author

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  • Pavel Wünsch

Abstract

European legislation for the prudential regulation of insurance and reinsurance sector has existed since the 1970s, gradually materialized in Directive 92/49/EEC and Directive 2002/83/EC, both known as Solvency I. Due to economic and political development the regime become insufficient and therefore in 2009 was adopted the Directive 2009/138/EC known as Solvency II, which represents a crucial modernization of European insurance regulation. Each of these regimes prescribes its own rules for the valuation of assets, liabilities and available capital to cover regulatory solvency requirement. This paper is focused on detection of conditions set up for valuation of assets and liabilities under each of the regime and to outline the calculation of available capital under each of the model.

Suggested Citation

  • Pavel Wünsch, 2017. "Own Funds Under Solvency Regime," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(3), pages 87-102.
    • Handle: RePEc:prg:jnlefa:v:2017:y:2017:i:3:id:189:p:87-102
    DOI: 10.18267/j.efaj.189
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    References listed on IDEAS

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    1. Martin Eling & Hato Schmeiser & Joan T. Schmit, 2007. "The Solvency II Process: Overview and Critical Analysis," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 10(1), pages 69-85, March.
    2. Peter Zweifel, 2014. "Solvency Regulation of Insurers: A Regulatory Failure?," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 37(2), pages 135-157.
    3. René Doff, 2008. "A Critical Analysis of the Solvency II Proposals," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(2), pages 193-206, April.
    4. International Monetary Fund, 2011. "Possible Unintended Consequences of Basel III and Solvency II," IMF Working Papers 2011/187, International Monetary Fund.
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    More about this item

    Keywords

    Insurance; Regulation; Solvency I; Solvency II; Available solvency margin; Available own funds; Eligible own funds;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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