Published on Thu, Mar 11, 2010 at 23:23 | Source : CNBC-TV18
Updated at Mon, Mar 15, 2010 at 16:02
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Differential solvency norms for insurers soon
Insurers may soon have differential solvency norms. This move could mean that some insurers may be forced to bring in additional capital. CNBC-TV18's Avni Raja reports on what this really means for insurers?
Insurers may soon have differential solvency norms. This move could mean that some insurers may be forced to bring in additional capital. CNBC-TV18's Avni Raja reports on what this really means for insurers?
The Insurance Regulatory and Development Authority (IRDA) says it will come out with differential solvency norms for insurers soon. Solvency margins are to be based on risk-based capital.
The move could mean some insurers are forced to bring in more capital. Insurers are likely to move towards risk-based capital, which is capital required considering the size of risk.
IRDA is also standardising the valuation process for liabilities of insurers. Companies will have to initiate process of calculation of economic capital, which is the capital required to cover the cost of risks.
Companies will have to submit economic capital calculations with effect from March 2010.
