For capital standards, China looks at Solvency II/RBC compromise

Via insurancenewsnet.com:

China is far from implementing a Solvency II capital adequacy system like that of the European Union at present, but might be moving toward a financial security system that is somewhere between risk-based capital and Solvency II, a better fit for the current market situation, according to a Beijing-based insurance market expert.

China is “not ready” to implement the Solvency II model due to an “unhealthy” market situation, particularly “market conduct” problems among primary insurers, but the Chinese insurance regulator is moving in that direction, said Steven Chang, Munich Re’s China chief executive, in an interview with BestWeek Asia/Pacific in Beijing.

Chang said China should design a model that is “in the middle between risk-based capital and Solvency II” to provide a capital adequacy standard related to risks, as well as to reflect a gradual risk management change.

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