Some notes on approaches to regulatory capital assessment for insurance firms

Abstract

AbstractThe intellectual climate around financial solvency regulation has changed markedly since the global financial crisis, especially with regard to the usefulness of market prices, the desirability of principle-based solvency assessment, the feasibility of a probabilistic approach to produce accurate capital estimates, and indeed whether solvency assessment should be risk-sensitive at all. This short paper provides some reflective notes on approaches to solvency capital assessment for insurance firms in this context.