Insurance and financial stability: Implications of the Tsunami view for regulation and supervision of insurers

Abstract

Purpose

This paper aims to consider implications of the IMF Global Financial Stability Report (April 2016 edition) for the regulation and supervision of insurers.

Design/methodology/approach

This paper first summarises the IMF Report and then discusses possible implications, examining the underlying hypothesis on which the “Tsunami view” has been formulated.

Findings

This paper finds that the Report provides some important implications for the regulation and supervision of insurers, although no commonalities in life insurers’ asset composition, which is the underlying hypothesis of the Tsunami view expressed in the Report, have been observed at a global level. One of the key implications is the importance of monitoring insurers’ exposures at granular levels in a more intensive manner from the perspective of macro-prudential supervision.

Originality/value

This is one of the first papers that try to challenge the findings and recommendations of the IMF Report and, at the same time, consider what implications can be taken for enhanced regulation and supervision of insurers.

Citation

Kobayashi, S. (2017), "Insurance and financial stability: Implications of the Tsunami view for regulation and supervision of insurers", Journal of Financial Regulation and Compliance, Vol. 25 No. 1, pp. 105-112. https://doi.org/10.1108/JFRC-06-2016-0049