Available Capital | Solvency terms | China | CIRC C-ROSS Conceptual Framework | The economic resources that can absorb losses in insurance undertakings on a going-concern basis or upon liquidation. Available capital is equal to admitted assets minus admitted liabilities of insurance undertakings. | A |
Available Capital | Solvency terms | IAIS | IAIS Supervisory Material | (Capital) The financial resources of an insurer and different variation/calculations of capital may be referred to as equity capital (i.e. paid-up, share, subscribed), economic capital and regulatory capital. | A |
Available Capital | Solvency terms | The European Economic Area | CEA Solvency II | Internally defined capital measure based on the companies' valuation of the market-consistent value of assets minus the market-consistent value of obligations. | A |
Available Capital | Solvency terms | The European Economic Area | Solvency II | Not specifically defined. The term eligible own funds is used as term for the amount of own funds to cover the Solvency Capital Requirement. | A |
Available Capital | Solvency terms | United States | NAIC ORSA MANUAL | The amount of resources that an enterprise has at a given point in time under a defined valuation or accounting basis (e.g., economic, statutory, GAAP, or a combination) to support its business and under the defined valuation represents the insurers assessment of the types of capital required to support its business. | A |
Available Solvency Margin | Solvency terms | The European Economic Area | CEA Solvency II | The difference between the value under regulatory measurement of the eligible capital held by an insurer, and the sum of the values under regulatory measurement of the obligations. | A |
Available Solvency Margin | Solvency terms | The European Economic Area | Solvency II | Not specifically defined. In Solvency II this is noted as excess own funds and be would be equal to the difference between the eligible own funds and the Solvency Capital Requirement. | A |
Deficit Capital | Solvency terms | The European Economic Area | Solvency II | Solvency deficit (term is mentioned in Solvency II Directive art. 221) | D |
Deficit Capital | Solvency terms | United States | NAIC ORSA MANUAL | If the amount of available capital is less than the determined risk capital of an enterprise, then the enterprise is said to have deficit capital. | D |
Defined Security Margin | Solvency terms | United States | NAIC ORSA MANUAL | Minimum threshold of available capital that a company wishes to achieve or maintain, consistent with the company's business strategy, risk appetite and risk tolerance. | D |
Double Gearing | Solvency terms | IAIS | IAIS Supervisory Material | Used to describe a situation where the same capital is used simultaneously as a buffer against risk in two or more legal entities of a conglomerate. | D |
Double Gearing | Solvency terms | The European Economic Area | CEA Solvency II | Situation in which one entity holds capital for regulatory purposes, which is issued by another entity within the same group and the issuer is also using the same capital for regulatory purposes. In that situation, externally generated capital of the group is 'geared up' twice; first by the parent, and then a second time by the dependent. | D |
Double Gearing | Solvency terms | The European Economic Area | Solvency II | The double use of own funds eligible for the Solvency Capital Requirement among the different insurance or reinsurance undertakings taken into account in that calculation shall not be allowed. (Solvency II Directive art. 222) | D |
Double Gearing | Solvency terms | United States | NAIC ORSA MANUAL | Used to describe situations where multiple companies (typically parent and subsidiary) are using shared capital to buffer against risk occurring in separate entities. | D |
Economic Capital | Solvency terms | IAIS | IAIS Supervisory Material | The capital needed by the insurer to satisfy its risk tolerance and support its business plans and which is determined from an economic assessment of the insurer's risks, the relationship of these risks and the risk mitigation in place. | E |
Economic Capital | Solvency terms | International Actuarial Association | IAA - Acturial Aspects of ERM for Insurance Companies | The amount of capital a company requires to cover its obligations with a given degree of confidence over a specific time horizon. | E |
Economic Capital | Solvency terms | International Actuarial Association | IAA Deriving Value from ORSA | The amount of capital a company requires to survive or to meet a business objective for a specified period of time and risk metric, given its risk profile. | E |
Economic Capital | Solvency terms | International Risk Management Institute | IRMI Terms | Market value of assets minus fair value of liabilities. Used in practice as a risk-adjusted capital measure; specifically, the amount of capital required to meet an explicit solvency constraint (e.g., a certain probability of ruin). | E |
Economic Capital | Solvency terms | The European Economic Area | Solvency II | Not specifically defined. The Solvency Capital Requirement should be determined as the economic capital to be held by insurance and reinsurance undertakings in order to ensure that ruin occurs no more often than once in every 200 cases or, alternatively, that those undertakings will still be in a position, with a probÂability of at least 99,5 %, to meet their obligations to policy holders and beneficiaries over the following 12 months. That economic capital should be calculated on the basis of the true risk profile of those undertakings, taking account of the impact of possible risk-mitigation techniques, as well as diversification effects. (Solvency II Directive (64)) | E |
Economic Capital | Solvency terms | United States | U.S. ASB Terms | The amount of capital an organization requires to survive or to meet a business objective for a specified period of time and risk metric, given its risk profile. | E |
Fungibility | Solvency terms | The European Economic Area | CEA Solvency II | Fungible Capital - That part of the capital of a group which can be transferred between different legal entities of the group. | F |
Fungibility | Solvency terms | United States | NAIC ORSA MANUAL | Within a group context, the ability to redeploy available capital from one entity to another. Fungibility is reduced where the movement of available capital within the group is constrained or regulation prohibits it. | F |
Fungible Capital (see Fungibility) | Solvency terms | The European Economic Area | CEA Solvency II | That part of the capital of a group which can be transferred between different legal entities of the group. | F |
Group Capital | Solvency terms | United States | NAIC ORSA MANUAL | Group capital represents the aggregate available capital or risk capital for the entire group. It will be impacted by the interaction of the risks and capital of the individual entities within the group, with properties such as diversification, fungibility and the quality and form of capital being important drivers. | G |
Minimum Capital Requirement | Solvency terms | China | CIRC C-ROSS Conceptual Framework | The amount of capital required according to the regulations to cover the adverse impact on the undertaking's solvency capability arising from market risk, credit risk, insurance risk, etc. | M |
Minimum Capital Requirement | Solvency terms | IAIS | IAIS Supervisory Material | In the context of a legal entity's capital adequacy assessment, the level of solvency at which, if breached, the supervisor would invoke its strongest actions, in the absence of appropriate corrective action by the insurer. | M |
Minimum Capital Requirement | Solvency terms | The European Economic Area | CEA Solvency II | The capital level representing the final threshold that triggers ultimate supervisory measures in the event that it is breached. | M |
Minimum Capital Requirement | Solvency terms | The European Economic Area | Solvency II | A minimum level of security below which the amount of financial resources should not fall (Solvency II Directive (60)). | M |
Risk Capacity | Solvency terms | Financial Stability Board | FSB Principles for an Effective Risk Appetite | The maximum level of risk the financial institution can assume given its current level of resources before breaching constraints determined by regulatory capital and liquidity needs, the operational environment (e.g. technical infrastructure, risk management capabilities, expertise) and obligations, also from a conduct perspective, to depositors, policyholders, shareholders, fixed income investors, as well as other customers and stakeholders. | R |
Risk Capacity | Solvency terms | International Actuarial Association | IAA - Acturial Aspects of ERM for Insurance Companies | The extent of risk that an organisation is capable of undertaking | R |
Risk Capital | Solvency terms | International Actuarial Association | IAA - Acturial Aspects of ERM for Insurance Companies | Risk Based Capital (RBC) Capital Requirements that reflect the risk profile of the financial institutions. | R |
Risk Capital | Solvency terms | International Risk Management Institute | IRMI Terms | Capital required to finance the consequences of business risks. | R |
Risk Capital | Solvency terms | The European Economic Area | Solvency II | The term is mentioned once in de Directive (Solvency II Directive (50)), but has not been defined. | R |
Risk Capital | Solvency terms | United States | NAIC ORSA MANUAL | An amount of capital calculated to be sufficient to withstand adverse outcomes associated with various risks of an enterprise, up to a pre-defined security standard. | R |
Solvency | Solvency terms | IAIS | IAIS Supervisory Material | Ability of an insurer to meet its obligations to policyholders when they fall due. Solvency includes capital adequacy but also involves other aspects of a solvency regime, for example, technical provisions, qualitative aspects (such as would be addressed in an enterprise risk management framework), supervisory review and supervisory reporting. | S |
Solvency | Solvency terms | International Actuarial Association | IAA Deriving Value from ORSA | The adequacy of available economic or regulatory capital to meet future obligations or regulatory requirements. | S |
Solvency | Solvency terms | United States | NAIC ORSA MANUAL | For a given accounting basis, the state where, and extent to which, assets exceed liabilities. | S |
Solvency Capital Requirement | Solvency terms | The European Economic Area | CEA Solvency II | The amount of capital to be held by an insurer to meet the Pillar I requirements under the Solvency II regime. | S |
Solvency Capital Requirement | Solvency terms | The European Economic Area | Solvency II | The supervisory regime should provide for a risk-sensitive requirement, which is based on a prospective calculation to ensure accurate and timely intervention by supervisory authorities. (Solvency II Directive (60) | S |