The Final Solvency II Framework: Will It Be Effective?

René Doff
Additional contact information
René Doff: Quantitative Economics, University of Amsterdam

The Geneva Papers on Risk and Insurance - Issues and Practice, 2016, vol. 41, issue 4, No 3, 587-607

Abstract: Abstract With Solvency II ready for implementation as per 2016, it is a good time to analyse the effectiveness of the framework. We build on earlier analyses of the preliminary framework dating from 2009. In the meantime many improvements have been implemented. We use 12 criteria to assess the effectiveness of Solvency II, and conclude that overall, Solvency II is effective. Not surprisingly, Solvency II is a major step ahead compared with the current supervisory framework. However, violations to some criteria remain. While some violations are because of simplifications, others are because of a lack of focus on particular risks (government bonds, inflation risk, liquidity risk). To resolve some of these violations, we propose specific prescribed and targeted stress tests through the own risk and solvency assessment and a more detailed focus on the effectiveness of governance structures.

Keywords: Solvency II; insurance regulation; prudential supervision; risk management; ERM (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1057/gpp.2016.4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:41:y:2016:i:4:d:10.1057_gpp.2016.4

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

DOI: 10.1057/gpp.2016.4

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().