Kathmandu. International rating agency Fitch Ratings has said that governments in Asian and European countries are making sweeping policy changes to boost the insurance sector.
China has also announced a 10% cut for self-investment. The move is expected to encourage insurers to infuse more capital into the institutional sector and consequently support economic growth.
According to the ratings, Australia is proposing to reduce capital changes for asset-liability adjustment. This will make the annuity business more attractive and affordable, the rating agency believes.
In Western countries, the European Commission has proposed a reduction in capital fees for some long-term self-capital investments and tranches of securities.
Insurance regulators in the US and UK are said to be increasingly wary of the increasing use of reinsurance treaties funded in life insurance.
According to Fitch Ratings, the U.S. introduced an asset adequacy test to ensure cash flow matching of assets and liabilities in such treaties; Meanwhile, the UK has hinted at potentially tightening regulation on funded reinsurance.
