Bern, 22 March 2011
As part of the FRTAP program, the World Bank's Centre for Financial Reporting Reform (CFRR) organized a one-day study visit for insurance regulators from the Czech National Bank (CNB) to FINMA in Bern on 22 March 2011
The study visit is part of a CFRR-managed project to improve the capacity of the CNB to regulate and supervise the insurance sector in the Czech Republic, in the light of the new EU directive on the solvency of insurance firms (Solvency II).
The main objectives of the visit were:
- To inform Czech insurance regulators about how the Swiss supervisory system for insurance operates in practice
- To give Czech insurance regulators an insight into how FINMA monitored compliance with Swiss rules on corporate governance, risk management and internal controls
The team of specialist insurance regulators from the CNB met senior staff from the insurance and qualitative assessment arms of FINMA. The Swiss insurance regulators described how FINMA evaluates the solvency of insurers using the Swiss Solvency Test (SST), which has many similarities with the Solvency II system that is planned to be introduced in the EU from 2013. They then outlined how insurance regulators in FINMA use financial analysis to supervise life insurance and reinsurance companies in Switzerland.
In the second half of the visit, the CNB team learned how FINMA monitored compliance with local rules on corporate governance, risk management and internal controls. FINMA carries out this monitoring using the Swiss Qualitative Assessment (SQA) approach, based on a combination of on-site visits, off-site monitoring and benchmarking against an insurance undertaking's peers. The representatives from FINMA described how they used this information to produce an overall assessment. FINMA published the results of its first round of SQA assessments (SQA1) in February 2010.
The CNB team ended the visit with a much clearer idea of how FINMA implemented its approach to regulation of the Swiss insurance sector. In order to build on the knowledge gained, a training session for CNB staff with Swiss and other experts will be held in Prague later in 2011 to explore in more detail particular technical aspects of insurance supervision.
Links of interest