PwC – Life Insurance Solvency Regime Developments: Striking the Right Balance in Canada

May, 2012 – Currently, there are many discussions between regulators, policy-makers, and industry associations regarding the development of global solvency requirements for life insurance companies, and these changes have the potential for wide-reaching impacts to the industry and the public.

Post financial-crisis, regulators around the globe find themselves having either to defend their regime, or explain how their enhancement proposals compare to other jurisdictions. To some extent this creates an environment of regulatory regime competition, which, of course, has implications for insurance companies. In this paper, we consider the solvency regime reform proposals with a focus on the potential impact on Canadian life insurers. An overriding premise we hold is that a profitable domestic life insurance industry that�s able to compete globally and support sustainable growth is fundamental to achieving policyholder security. Such strength is critical for ongoing access to capital, both in terms of amount and cost, as well as for enabling the industry to invest in the resources to effectively measure and manage its business risks.

This publication reflects on these changes and discussions with key stakeholders, including life insurance companies, regulators, industry bodies, analysts, and rating agencies. It highlights key themes and trends arising from the emerging global solvency developments and what they may mean for Canadian life insurance companies.

To access the paper, go here.

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