Regulatory Alerts2017-03-17
2016 Volatility Reserve Regulation (SWRV 2016)
The Austrian Financial Market Authority issued the 2016 Volatility Reserve Regulation to mandate non-life and reinsurance undertakings to establish volatility reserves for specific insurance classes and business lines. The regulation defines precise calculation methods for claims and expense ratios, sets statistical prerequisites for reserve establishment, and dictates the procedures for allocating funds during surplus years and releasing them during deficits. It further standardizes the treatment of indirect business, new insurance lines, and transitional arrangements to ensure consistent financial reporting and risk management across the sector.
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