IAAHS COLLOQUIUM 2004 Session J IAS and Solvency for Health - PowerPoint PPT Presentation

IAAHS COLLOQUIUM 2004 Session J IAS and Solvency for Health Insurers

IAS and Solvency for Health Insurers 15.15 Overview: IASB Phase 1&2 / IAA and IAIS Proposals (David Paul) 15.30 Internal Models for Capital Assessment - UK Experience (Rael Davis) 15.55 Solvency & Capital Adequacy for Australian Health Insurers (Gayle Ginnane) 16.20 From statutory to International Accounting – Experiences of a Germany Health Insurer (Kai Spier)

IAAHS COLLOQUIUM 2004 Session J Overview

Overview • Insurance Accounting – IFRS – a global standard for insurance accounting • International Association of Insurance Supervisors (IAIS) - Global Principles • International Actuarial Association (IAA) • EU Solvency 1 and 2 • National Case Studies

Insurance Accounting Goes Global • International Accounting Standards (IAS) • International Financial Reporting Standards (IFRS) • Present Situation: - differences in insurance accounting between countries - difficult to compare and understand financial statements • EU Stock Exchange listed companies must adopt IFRS from 1 st January 2005

I.F.R.S. Phase 1 • Summer 2003: Controversial Exposure Draft (ED5) • Spring 2004: IFRS published • Broad “definition” of insurance contract • Temporary measure, dispensation from IAS 39 • Locally accepted insurance accounting practice may continue • No requirement to disclose “fair value”

I.F.R.S. Phase 2 • Work to re-commence in 2004 • Original fair value proposals, but….. • To include consideration of other possible measurement bases • Unlikely until 2008 • May insurers include in their fair value cash flow for future renewal premiums – relevant to health insurers?

International Association of Insurance Supervisors (IAIS) • Insurance core principles and methodology consist of • esential principles that need to be in place for a supervisory system to be effective • explanatory notes that set out the rationale underlying each principle • criteria to facilitate comprehensive and consistent assessments • benchmark for insurance supervisors in all jurisdictions.

International Association of Insurance Supervisors (IAIS) • Principles on Capital Adequacy and Solvency • Stress testing by insurers Guidance Paper • The use of actuaries as part of a supervisory model Guidance Paper

International Actuarial Association (IAA) • responded to “On Solvency, Solvency Assessments and Actuarial Issues - An IAIS Issues Paper” • offered support - IAA Solvency Working Party report • Risk-based Capital Solvency Structure Working Party

European Union • Insurance Committee ~ DG MARKT (Internal Market) • Solvency I • now organising Pillar I and Pillar II work with CEIOPS • Solvency II - risk-based approach to target capital - e.g MARKT/2543/03 • some supervisors in EU member states are already advancing in style of Solvency II