News
he recent proposal by the International Association of Insurance Supervisors (IAIS) to apply additional risk-adjusted capital and could have adverse consequences on the That is the view of Stuart Shipperlee, analytical partner, Litmus Analysis, who says the IAIS seems to be “joining the regulatory as a potential threat to the stability of the global “Other than when they choose to act as
21.10.13 MONDAY
New IAIS capital rules to hinder industry T
There are some scenarios that could cause
failing could cause such a problem but the scale of its failure would need to be catastrophic to of any given claim that the loss could trigger A huge catastrophic event wiping out much
of the reinsurance industry in one fell swoop a risk that really falls outside any reasonable application of regulatory
capital rules,” Stuart Shipperlee
represent a systemic source of risk is debatable to say the least, particularly if that leads to a requirement for additional capital levels over and above those already considered prudent regulatory
regimes such as Solvency II,”
systemic risk in question derives from the ‘contagion’ or domino effect when the failure of may be caused either by the consequences of money back and asset prices plunging—or by the knock on impact of bad debts on the failed
“Extra capital can mean only insurance or more expensive
Such a scenario does not translate into
investment related life insurance products can contain an option for policyholders to demand an immediate pay-out, any liquidity risk would “A systemic problem would only result if a
more manageable than controlling the nature and
He suggests that a sounder prudential
regulatory approach might be to simply prevent Alternatively, a ‘mark to market’ approach
universal direction of travel in accounting and regulation) would bring stability to the system “Restricting, as it does, the ability of these otherwise natural ‘buy and hold’ investors actually matters) this could simply make things a great deal worse, to wit preventing those “Indeed, were that to be addressed then,
insurers could be a source of systemic risk
R&Q completes its largest acquisition since 2006 R
andall & Quilter’s (R&Q) recent acquisition of Cyprus-domiciled legacy
business Flagstone Alliance Insurance and Reinsurance (FAIR) from Validus is the most acquisition the R&Q Group has made since Lloyd’s RITCs apart, the level of net insurance “Again, outside of Lloyd’s and the captives we have acquired at least, the business assumed,
although in run-off is more recent than many primarily London broker-based business which FAIR, which commenced underwriting in
primarily international reinsurance business million, a discount to the estimated adjusted net The business, which is domiciled in Cyprus, will be managed by R&Q and assets will
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be held in UK based banks and custodian country of domicile was not a consideration in “FAIR’s country of domicile wasn’t an important factor when considering the acquisition, however, being with the EEA, cross border merger and portfolio transfer mechanisms which afford us consolidation options to bring about operational and capital
DAY 1: Monday October 21 2013 | BADEN-BADEN TODAY | 21
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