Ernst & Young call for insurance regulatory evolution
The Global Insurance Centre of Ernst & Young has urged the insurance industry and regulators to seize upon the global financial crisis as an opportunity for the evolution of industry regulations.
Although it is true that liquidity concerns in the insurance sector are generally far fewer than in banking, the financial crisis has dramatically undermined capital reserves whilst simultaneously affecting asset values.
Philipp Keller, leader of Ernst & Young’s Solvency II Taskforce, describes the situation as clearly showing that the worldwide financial system is heavily integrated which in turn has substantial implications that may not have been immediately apparent.
Keller advises that the optimal approach now is for sound governance together with good supervisory principles.
Ernst & Young believes that a more rounded view of potentially damaging events, which includes analysis of short-term liquidity as well as cashflow, would be best.
In addition, the firm has called for the standard quantitative requirements to be retained, but with the addition of greater articulation and testing of possible threats.
Category: Insurance News
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