BaFin has supplemented its current Solvency I supervisory regime
Stress testing: BaFin has supplemented its current Solvency I supervisory regime for
insurance companies with stress testing requirements. Although this does not lead to
explicit capital requirements for asset risks, asset cover stress tests are submitted by
approximately 320 direct insurance undertakings (life, health and property & casualty
insurers) for analysis.
The asset cover tests assess the coverage of available assets to meet
liabilities under four scenarios over a one-year time horizon. For 2014, BaFin is planning
to enhance its stress tests to have a more market value-based focus and to refine the
systematic and market-wide analysis of stress tests. Furthermore, BaFin uses scenario
analysis on an annual or semi-annual basis as a quantitative instrument to review an insurer’s
resilience in adverse market scenarios.
Recently, the scenario analysis instrument has been
expanded to include a multi-year survey (four years ahead) for expected business results and
solvency prognoses of insurers.