IA Issues QIS 3 Package for Development of Risk-Based Capital Regime
IA of Hong Kong issued templates and technical specifications for the third quantitative impact study (QIS 3) on the development of risk-based capital (RBC) regime. Additionally, IA released a package of template and technical specifications on matching adjustment for insurers conducting long-term business. IA has also published template and technical specifications related to Key Insurance Risks and Trends (KIRT) Survey. Authorized insurers have been requested to participate in the QIS 3 and the KIRT survey and submit the completed template(s) by November 29, 2019.
The QIS 3 package contains a template for submission and a template for reference, technical specifications for the completion of the corresponding template, annex on discount rates, and a question and answer template. IA also finalized the package of template and technical specifications on matching adjustment for insurers carrying on long-term business. The matching adjustment package stipulates the requirements in determining the discount rates for the valuation of insurance liabilities. Matching adjustment aims to reflect the assets held by individual companies in supporting the insurance liabilities and their asset and liability management practices.
The QIS 3 package represents the collaborative effort of IA and the industry. In developing the QIS 3 package, IA has worked on the industry data collected from the second quantitative impact study (QIS 2) and engaged representatives of the Hong Kong Federation of Insurers and the Actuarial Society of Hong Kong for a technical discussion, which includes the approach for moderation and re-calibration. In addition, the QIS 3 package has taken into account international standards and practices, particularly the global Insurance Capital Standard (ICS) being developed by the IAIS. QIS 3 is contributory to forming the data set for the insurance industry in Hong Kong. The result would form the basis for IA to finalize the set of rules on Pillar 1 capital requirement, after which a consultation process is expected to be carried out in 2020.
For the annual KIRT survey, HKMA will transmit only aggregated industry data set to IAIS. IAIS plans to annually conduct a global monitoring exercise in the form of KIRT survey to collect relevant data, with the goal of developing a holistic framework for systemic risk in the global insurance sector. The data will enable insurance supervisors to identify and address the potential buildup of systemic risk in the insurance sector.
Related Links
Comment Due Date: November 29, 2019
Keywords: Asia Pacific, Hong Kog, Insurance, Risk-based Capital Regime, QIS 3, Matching Adjustment, Systemic Risk, KIRT Survey, IAIS, IA
Featured Experts
Dr. Samuel W. Malone
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Previous Article
HKMA Revises Implementation Schedule for Initial Margin RulesRelated Articles
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
PRA Statement on Application of Matching Adjustment Amid Crisis
PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.
EBA Provides Clarity on Implementation of Certain COVID-19 Policies
EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.
EC Consults on Revision of Network and Information Systems Directive
EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.
PRA Statement on LIBOR Transition and PRA Resolution-Related Rules
PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.
PRA Issues Updates to Pillar 2A Capital Framework in UK
PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.
BCBS Report Examines Progress on Adoption of Basel III Framework
BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.
FCA Proposes Guidance to Further Support Consumer Credit Customers
FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.
ACPR Publishes Draft of Taxonomy RAN 1.4.0 for Solvency II Reporting
ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.
BCBS Amends Guidelines on Sound Management of AML/CFT Risks
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).
