Regulatory Alerts2022-05-17
Consultation Paper on Insurance Solvency Standards: Guarantees and Off-Balance Sheet Exposures
The Reserve Bank of New Zealand proposes amendments to its Insurance Solvency Standards regarding the recognition of third-party guarantees and off-balance sheet exposures. The consultation introduces a haircut formula for limited-term guarantees, imposes a 15% cap on capital mitigation via guarantees, and clarifies risk charge applications. Additionally, it expands capital requirements to include estimated payments from unpaid claims disputes and aligns off-balance sheet exposure treatments with concentration and currency risk charges.
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