We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
13 June 2017
On May 3 2017 the securities and insurance regulator (SVS) published for comment the fifth version of its methodology for determining the risk-based capital of insurers: "Draft Methodology for the Determination of Risk-Based Capital of Insurance Companies, Exercise No. 5 of RBC Application". The initiative is part of its risk-based supervision scheme.
Risk-based capital is a method of determining the minimum amount of capital required for a reporting entity to support its business operations, taking into account its size and risk profile. It also establishes capital requirements for insurers based on the risks to which they are exposed, thus allowing them to mitigate those risks.
The latest version ‒ as well as the conceptual bases developed by the SVS for analysis, discussion and improvement ‒ includes the following changes from the previous version:
As in previous versions, the latest version instructs all insurers to carry out an exercise of application using the new methodology. These results will allow the standard formula and capital factors to be continually calibrated.
The latest version will be subject to public consultation until July 31 2017. The results of the fifth exercise of application of the risk-based capital methodology should be sent to the SVS by this date.
For further information on this topic please contact Santiago Montt Vicuña at Montt y Cia SA by telephone (+56 22 233 8266) or email (firstname.lastname@example.org). The Montt y Cia SA website can be accessed at www.monttgroup.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.