Regulating Insurance Groups: A Comparison of Risk-Based Solvency Models
Regulators are currently developing group-wide capital standards that are intended to enable the effective monitoring of insurance groups. Some jurisdictions are taking steps toward models with a focus on the groups’ consolidated balance sheets, while other models focus on the interrelations of the groups’ legal entities. This paper compares two general approaches to group-wide solvency in light of the regulatory challenges of regulatory inconsistency, risk dependencies, and risk aggregation: a consolidated approach and a legal entity approach. In order to contribute to the current discussion on the regulation and risk management for insurance groups, we support our line of reasoning by using a generalized model of Gatzert and Schmeiser (2011). Our findings show that a solely consolidated viewpoint is likely to underestimate shortfall risks in times of financial crises, whereas while a sole focus on the interrelated legal entities generally makes it possible to display different group structures it cannot control regulatory arbitrage.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 1 (2013)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: 1 More London Place, London SE1 2AF, UK|
Phone: +44 20 7951 2000
Web page: http://www.gfsi.ey.com/
When requesting a correction, please mention this item's handle: RePEc:ris:jofipe:0014. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Damiano Brigo)
If references are entirely missing, you can add them using this form.