The Standard Formula Podcast | Using an Internal Model to Calculate the Solvency Capital Requirement
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On Tuesday, September 10, the Federal Reserve announced a reproposal of the much discussed and awaited Basel III Endgame. However, before we dive into the reproposal, it is important to take a step back and look at how we got...more
Solvency II is organised around three core pillars of prudential regulation, which ensure the safety and soundness of (re)insurers, in line with the scale, nature and complexity of their business: - Pillar One focuses on...more
Private company investing is inherently risky, but these risks can be mitigated if investors take proactive steps before making this type of investment. This due diligence action plan for potential investors includes the...more
The Situation: Prior to the enactment of Capital Requirements Directive ("CRD") VI, corporate governance rules for the financial services industry were not harmonized across EU Member States....more
On 17 July 2024, the Basel Committee on Banking Supervision (BCBS) finalized revisions to the prudential framework for banks’ exposures to cryptoassets. The revisions largely introduced additional requirements relating to the...more
This article, updated quarterly, looks ahead to the areas expected to be prioritised by financial services regulators across the globe; we look at the key regulatory trends emerging from the past year which inform our...more
The European Commission has adopted a Delegated Regulation amending the EU Capital Requirements Regulation with regard to the date of application of the own funds requirements for market risk. In addition, alongside the...more
The PRA has released an important statement on its approach to funded reinsurance. Our view is that the statement endorses the conceptual principle that funded reinsurance (particularly to offshore counterparties) should best...more
There are two main methods of calculating the solvency capital requirement (SCR) under Solvency II, the “standard formula” and “internal model” methods: (a) The standard formula method, as its name suggests, is the default...more
Recently, the Fed released the 2024 Federal Reserve Stress Test Results and found that the tested banks have “sufficient capital” to absorb losses and weather a recession while staying above minimum capital requirements. The...more
Matt Bisanz interviews Georges Duponcheele of MunichRe and William Perraudin of Risk Control Ltd. about their work in developing approaches to securitization capital requirements....more
The Situation: The European Union ("EU") banking legislation has been substantially reviewed and provides notably for a new regime applicable to cross-border activities from non-EU jurisdictions....more
Commission Delegated Regulation (EU) 2024/1085 has been published in the Official Journal of the European Union, supplementing the EU Capital Requirements Regulation with regard to regulatory technical standards on the...more
The Solvency Capital Requirement (SCR) is designed to protect policyholders by helping ensure that insurers can survive difficult periods and pay claims as they fall due. It prescribes a specific level of capital that an...more
Our latest episode of “The Standard Formula” Back to Basics series explores the internal model method for calculating the Solvency Capital Requirement. Host Rob Chaplin is joined by George Belcher to dissect the advantages...more
The Rhode Island General Assembly adjourned sine die on Friday, bringing the 2024 legislative session to a close. Below is an overview of noteworthy legislation passed during the session....more
“The value of technical provisions should correspond to the amount which another insurance or reinsurance undertaking (the reference undertaking) would be expected to require to take over and fulfil the underlying insurance...more
The European Union’s new Capital Requirements Directive 6 (CRD6) introduces significant regulatory changes for non-EU banks operating within EU Member States. This update explores the impact of CRD6 on US lenders providing...more
The European Parliament has recently approved the final EMIR texts, known as “EMIR 3.0” that were agreed between the Council of the EU and the European Parliament in February and which introduce changes to the current EMIR...more
Because banks receive favorable capital treatment when a credit facility’s tenor is shorter than one year, lenders increasingly offer financing with 364-day tenors and uncommitted extension option terms of up to 364 days. In...more
December 2023 saw the publication by the EU of the near-final version of its ‘Banking Package’ that makes significant changes to the Capital Requirements Directive known as ‘CRD VI’. This article is going to focus on the CRD...more
TYPES OF BUSINESS ENTITIES - In the Netherlands, there is a distinction between entities which qualify as legal entities (‘rechtspersonen’) and partnerships (‘personenvennootschappen’) which do not. Legal entities are...more
Thailand has a civil or codified law system. The main legal codification governing commercial aspects in Thailand is prescribed under the Civil and Commercial Code (“CCC”) and other related Acts which are issued from time to...more
What is the government proposing? The UK government (“HM Treasury”) has launched a Consultation setting out its proposals to amend the UK special resolution regime (“SRR”) to direct that the UK depositor guarantee scheme...more
1. Types of Business Entities - The currently available local corporate structures for conducting business are: - General partnership - Limited partnership - Limited liability company - Joint-stock company -...more