IoM Regulator To Refine Non-Life Insurer Proposals
by Jason Gorringe, Lowtax.net, London
22 February, 2016
The Isle of Man Financial Services Authority has announced that it is to make changes to its proposals for a new valuation and capital adequacy framework for non-life insurers.
The Authority has announced that it has ended early a Quantitative Impact Study (QIS) with non-life insurers, which had required them to share balance sheets and information on capital requirements. This exercise was launched in October 2015 and was due to end on April 30, 2016.
Announcing the end of the QIS, the Authority said: "We are grateful to the non-life sector for its engagement in this process and for the feedback provided to date. A number of themes have emerged from this feedback, several of which we believe it would be appropriate to address, by refining the proposals for the framework for valuation and capital adequacy, before further work is undertaken by industry."
According to the Ministry, these themes include:
- The desirability of reflecting the impact of contractual coverage limits, such as aggregates, in the standard formula;
- Further clarification of instructions for completion of the exercise, including when approximations may be applied (subject to proportionality);
- Potentially reducing the capital requirements in respect of loans to other members of the insurer's group of companies, particularly for insurers only insuring the risks of such members; and
- Potentially further simplifying the proposals, particularly for insurers only insuring the risks of related parties.
The Authority therefore ended the QIS early to enable industry to provide the Authority with data on the extent to which the risks underwritten by each company are in respect of related or unrelated parties, and so that the Authority can prepare refined proposals to be tested in a further QIS. This exercise is expected to be launched in the summer of 2016, to be completed within four to five months.
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