I’ve been working with a few insurers and reinsurers on credit risk recently. We’ve had plenty of reasons to think about it, what with new regulations (SAM, Basel III) and South African government downgrades. However, sometimes I get the impression that credit risk is viewed as an academic risk, as something that happens to others,…
A client recently mentioned that they were concerned about the implication that the adoption of Solvency Assessment and Management (SAM) would have on insurance accounting under current IFRS4. The apparent concern was that measurement of policyholder liabilities for IFRS reporting would change to follow SAM automatically. Let me start out by saying this is categorically…
The Technical Provisions Task Group and KPMG ran a workshop for industry participation on risk-free rates recently. The idea was to see whether we could improve the extent and quality of industry comment on key, controversial areas of the proposed SAM regime. Turnout was good, but not great, but the discussion and points raised were…
I haven’t posted in ages – plenty happening on the work front, which is mostly good news. I also don’t really have time to comment properly on this article but Wits academic, Robert Vivian, but it’s interesting reading all the same. Read Vivian’s letter first and then come back to my comments. I can’t help…
A client was asking about the key changes coming up for SAM Interim Measures. This document (from the FSB) is about the best summary I’ve seen:Â Interim Measures Update (Governance) My take on this is that the FSB is basically expecting compliance or a pretty concerted effort and reasonable compliance with these requirements NOW. The original…
Maybe it doesn’t feel like a brave prediction, but the official word is still Jan 2014. But this is me sticking my pole in the sand – there’s too much uncertainty, too much politics going on to get this right in time.
Lots on this topic to come over the next few months. IAIS chair Peter Braumüller acknowledged that traditional insurance does not “generate or amplify systemic risk† within the financial system or in the real economy. Although non-traditional risks do (derivatives exposures, CDS etc.) Meanwhile, the IAIS has released it’s proposals for identification and assessment of…
