IMF Working Papers

Implementing Risk-Based Solvency for Insurers—Lessons from Kenya, Mexico, and South Africa

By Peter Windsor, Suzette J Vogelsang, Christiaan Henning, Kerwin Martin, Elias Omondi, Gerardo Rubio, Jooste Steynberg

November 22, 2024

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Format: Chicago

Peter Windsor, Suzette J Vogelsang, Christiaan Henning, Kerwin Martin, Elias Omondi, Gerardo Rubio, and Jooste Steynberg. "Implementing Risk-Based Solvency for Insurers—Lessons from Kenya, Mexico, and South Africa", IMF Working Papers 2024, 240 (2024), accessed December 23, 2024, https://doi.org/10.5089/9798400294631.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

International standards and best practice supports the implementation of a risk-based solvency regime in the regulation and supervision of insurers. Several emerging market and developing economies are transitioning to such a solvency regime or planning to do so. This paper discusses Kenya, Mexico, and South Africa’s journey to putting in place a risk-based solvency regime which had several common elements notwithstanding significantly different insurance sectors. The transition was a multi-year project requiring dedicated additional resources; restructuring of the regulator, including redesigning supervisory processes and tools and upgrading information technology systems; and significantly greater coordination between the regulator and the insurance industry.

Subject: Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial statements, Insurance, Insurance companies, Public financial management (PFM), Risk-based supervision, Solvency

Keywords: Africa, Financial statements, Global, Insurance, Insurance companies, Penetration rate, RBS implementation, RBS project, Risk-based Solvency, Risk-based supervision, Solvency, Solvency assessment, Solvency regime, Supervision of insurer

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