^aAPRA, GPO Box 9836, Sydney NSW 2001, Australia. E-mail: tom.karp@apra.gov.au

Abstract

Insurance regulation and supervision is aimed at maintaining efficient, fair, safe and stable insurance markets for the benefit and protection of policyholders. So ensuring an insurer remains solvent and thus able to fulfil its obligations under all insurance contracts under all reasonably foreseeable circumstances is crucial. Insurer solvency therefore takes a central position in not only risk management by insurers, but also in effective insurance supervision, which must include a solvency regime which lays down solvency requirements.