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ACAPS renews its insurance company rating system

In anticipation of the entry into force of the “Risk-Based Solvency” standard, which requires modernization and strengthening of supervisory oversight, ACAPS is considering revising its rating system for insurance and reinsurance companies. The aim is to build a new, more efficient scoring tool with major innovations in the control process, which makes it possible to ensure that insurers comply with the applicable set of supervisory rules following a risk-based supervisory approach.

New major project for the Norwegian Social Insurance Agency (ACAPS). With the aim of modernizing and strengthening its supervisory oversight, the supervisory authority plans to revise its rating system for insurance and reinsurance companies. This project comes in anticipation of the entry into force of the standard”Risk-based solvency“.

As a reminder, the Authority is responsible for supervising the insurance sector, the pension sector and mutual companies. For the insurance sector, ACAPS exercises its control in accordance with the Insurance Act with the companies in the sector and the insurance intermediaries. It is mainly responsible for granting and revoking authorizations of these entities, checking their solvency with the aim of protecting the rights of policyholders and beneficiaries and ensuring macroprudential control in coordination with the other supervisory authorities in the financial sector. Within this framework, ACAPS has for some years started a major project: risk-based solvency (SBR). This is a national supervisory framework which aims to strengthen the resilience of insurance and reinsurance companies to all the risks incurred, improve their management system and strengthen transparency in terms of information.

This major project revolves around three pillars: (1) the quantitative requirements attached to solvency capital required and equity, (2) the qualitative requirements regarding management and management and internal risk and solvency assessment (ORSA) as well as (3) the requirements for the component of Informationespecially financial communication to the supervisory authority and the public.

This project also responds to the compliance of the supervisory framework and supervisory practices with the best international standards and specifically with the Insurance Core Principles (ICP) issued by the International Association of Insurance Supervisors (IAIS). In anticipation of the use of the SBR system, the Autorité thus plans to change and modernize its supervision. And within this supervisory framework, insurers and reinsurers must comply with a set of supervisory rules generally enshrined in statute or subordinate legislation. The role of ACAPS is to ensure that insurers actually comply with these rules. To do this, it has internally developed a tool to score companies according to a new risk-based supervisory framework, instead of a check based solely on compliance verification. This new framework should take into account all the risks assumed by insurance and reinsurance companies and also address governance and risk management issues. It is in this context that ACAPS is in the process of recruiting an expert who will support it in the revision of its current insurance assessment system, via a new digital solution that includes significant innovations in the control process that, in particular, allows the full automation of collection, processing, updating and integration of data.




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