Project

reporting; insurance; regulation

Lead
Lay summary
In the European insurance industry, regulatory and reporting frameworks are currently subject to farreaching reforms. The Swiss Solvency Test, a new solvency requirement in Switzerland, is already in force. The new European solvency framework, Solvency II, will presumably be implemented by end 2012 (European Union, 2009). On the part of reporting, the Market Consistent Embedded Value (MCEV) Principles (CFO Forum, 2009b) were published in June 2008 and are expected to be implemented from 31 December 2011 on. An exposure draft on IFRS 4 Phase II, a new reporting standard defining how to recognize, measure, and disclose insurance contracts, was published in July 2010 (IASB, 2010a). Finally, in a White Paper on insurance guaranty systems, the European Commission (2010) proposes that a directive should be introduced which ensures that all Member States of the European Union have an insurance guaranty system in place that meets certain minimum requirements. We analyze these regulatory frameworks in the details, put them into relation to each other, analyze costs and benefits, and estimate their economic impact. To achieve this, we plan to write, present, and publish two papers related to these new regulatory frameworks. Both papers extend existing literature and have essential practical implications for insurers, regulators, as well as investors. Paper 1 takes a broad view and compares new regulatory and reporting frameworks. Different takeholders’ perspectives are analyzed in order to assess the economic impact of the regulatory concepts. The paper has a special emphasis on the relation between the different frameworks which is of particular relevance due to various interrelations and interactions. Paper 2 builds on paper 1 and aims at estimating the actual costs (direct and indirect) of each single new regulatory and reporting framework. This will help insurance companies to prepare for the introduction of these concepts. Given the substantial scale of the new regulatory and reporting frameworks, this research project is of high relevance to insurers, regulatory, investors, and policyholders.

Direct link to Lay Summary

Last update: 21.02.2013

Active participation

Number	Title	Start	Funding scheme

In the European insurance industry, regulatory and reporting frameworks are currently subject to farreaching reforms. The Swiss Solvency Test, a new solvency requirement in Switzerland, is already in force. The new European solvency framework, Solvency II, will presumably be implemented by end 2012 (European Union, 2009). On the part of reporting, the Market Consistent Embedded Value (MCEV) Principles (CFO Forum, 2009b) were published in June 2008 and are expected to be implemented from 31 December 2011 on. An exposure draft on IFRS 4 Phase II, a new reporting standard defining how to recognize, measure, and disclose insurance contracts, was published in July 2010 (IASB, 2010a). Finally, in a White Paper on insurance guaranty systems, the European Commission (2010) proposes that a directive should be introduced which ensures that all Member States of the European Union have an insurance guaranty system in place that meets certain minimum requirements.We want to analyze these regulatory frameworks in the details, put them into relation to each other, analyze costs and benefits, and estimate their economic impact. To achieve this, we plan to write, present, and publish two papers related to these new regulatory frameworks. Both papers extend existing literature and have essential practical implications for insurers, regulators, as well as investors. Paper 1 takes a broad view and compares new regulatory and reporting frameworks. Different takeholders’ perspectives are analyzed in order to assess the economic impact of the regulatory concepts. The paper has a special emphasis on the relation between the different frameworks which is of particular relevance due to various interrelations and interactions. Paper 2 builds on paper 1 and aims at estimating the actual costs (direct and indirect) of each single new regulatory and reporting framework. This will help insurance companiesto prepare for the introduction of these concepts.Given the substantial scale of the new regulatory and reporting frameworks, this research project is of high relevance to insurers, regulatory, investors, and policyholders.