In this paper, we first discuss the characteristics and major benefits of the Swissrisk-based capital standards for insurance companies (Swiss Solvency Test), introduced in 2006. As the insurance industry is one of the largest institutional investors in Switzerland, changes to its asset and...

The aim of this paper is to develop an alternative approach for assessing an insurer’s solvency as a proposal for a standard model for Solvency II. Instead ofderiving minimum capital requirements—as it is done in solvency regulation—our model provides company-specific minimum standards for...

Dynamic financial analysis (DFA) has become an important tool in analyzing thefinancial situation of insurance companies. Constant development and documentationof DFA tools has occurred during the last years. However, several questionsconcerning the implementation of DFA systems have not been...

As early as the 1970s, European Union (EU) member countries implemented rulesto coordinate insurance markets and regulation. However, with the more recentmovement toward a general single EU market, financial services regulation hastaken on new meaning and priority. Solvency I regulations went...