Newsletter
RBC TO BE IMPLEMENTED IN JULY 2003
In line with the amendments to the Insurance Law that were enacted on 9 July 2001, in De-cember 2001 the Department of Insurance (DOI) published the Regulations Governing Risks Set-tlement Ability of Insurance Enterprise. The director of the DOI stated that the risk-based capital (RBC) system for insurers would be for-mally implemented on 9 July 2003. Under the RBC system, if insurance companies are able to appropriately organize their investments in such a way as to assure their solvency, the DOI hopes that in the near future it will be able to lift the various restrictions on investments by insurance companies under the Insurance Law, in order to arrive at a regulatory model that combines a hands-off approach to insurers' business opera-tions with strict regulation of their financial soundness.