Insurance and Issues in Financial Soundness

Das, Udaibir; Davies, Nigel; Podpiera, Richard

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Insurance and Issues in Financial Soundness

IMF Working Paper No. 03/138

44 Pages Posted: 31 Jan 2006

See all articles by Udaibir Das

Richard Podpiera

International Monetary Fund (IMF); Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Date Written: July 2003

Abstract

This paper explores insurance as a source of financial system vulnerability. It provides a brief overview of the insurance industry and reviews the risks it faces, as well as several recent failures of insurance companies that had systemic implications. Assimilation of banking-type activities by life insurers appears to be the key systemic vulnerability. Building on this experience and the experience gained under the FSAP, the paper proposes key indicators that should be compiled and used for surveillance of financial soundness of insurance companies and the insurance sector as a whole.

Keywords: insurance, financial stability, soundness indicators

JEL Classification: G20, G22

Suggested Citation: Suggested Citation

Das, Udaibir and Davies, Nigel and Podpiera, Richard, Insurance and Issues in Financial Soundness (July 2003). IMF Working Paper No. 03/138, Available at SSRN: https://ssrn.com/abstract=879214