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
Previous Article
US Agencies Propose to Amend Rule on Supplementary Leverage RatioNext Article
ACPR Publishes Draft of ORPS Taxonomy Version 1.0.0Related Articles
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA Finalizes Standards on Methods of Prudential Consolidation
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA Updates List of Other Systemically Important Institutions in EU
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS Report Concludes Basel Risk Categories Can Capture Climate Risks
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities Welcome FSB Review of their Remuneration Regime
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA Letter on Addressing Risks from Use of Deposit Aggregators
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA to Amend Banking Act and Rules in Coming Months to Transpose CRD5
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC Delegated Regulation on Specialized Lending Exposures Under CRR
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI Proposes to Enhance Assurance Expectations for Basel Returns
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB Issues Results of Benchmarking Analysis of Recovery Plans of Banks
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.
