Regulatory Alerts2025-06-09
GFSC Guidance Note Solvency 2: Reinsurance Counterparty Credit Risk
The Gibraltar Financial Services Commission issued this guidance to set expectations for insurance and reinsurance undertakings regarding the management of reinsurance counterparty credit risk. It requires firms to ensure robust risk management systems that accurately reflect risk transfer and concentration exposures within their Solvency Capital Requirements and Own Risk and Solvency Assessments. The regulator mandates prudent mitigation strategies for significant counterparty default concentrations, including the use of collateral or funds withheld, to maintain financial stability and facilitate orderly resolution.
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