On the measurement of solvency of insurance companies: recent developments that will alter methodsadopted in emerging markets

Craig Thorburn

No 3199, Policy Research Working Paper Series from The World Bank

Abstract: Solvency-both as an economic requirement in the market and as a regulatory and supervisory tool-is critical to all insurance markets. Current market conditions, coupled with expected institutional changes, will place particular burdens on emerging and developing markets. Institutional solvency, effective risk management within companies, effective supervisory oversight, and the development of market disciplines are all linked. The author proposes that the effective implementation of the emerging regime needs a careful and diligent phased process of capacity-building. The first priorities are identified as a strong supervisor, a basic solvency margin requirement, and the initiation of efforts to gather appropriate data sets. This can be followed by advancing development of more sophisticated solvency regulation, increased use of technical expertise, and increased use of market disciplines as the community and financial markets become more able to exercise such discipline.

Keywords: Insurance Law; Insurance&Risk Mitigation; Payment Systems&Infrastructure; Banks&Banking Reform; Health Economics&Finance; Insurance&Risk Mitigation; Banks&Banking Reform; Insurance Law; Health Economics&Finance; Non Bank Financial Institutions (search for similar items in EconPapers)
Date: 2004-02-01
New Economics Papers: this item is included in nep-fin
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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