1. As advertised earlier, I will be presenting ‘The Valuation of Equity Release Mortgages’, to the Network of Consulting Actuaries. All welcome.
2. On Friday 8 February I will be presenting ‘Routing around malfunction: can the financial system ever be open?’ Booking form here.
Jimmy Wales (founder of Wikipedia and campaigner for an open knowledge society) once claimed that “The internet interprets any type of centralized planning as a malfunction and routes around it. The command-and-control model is doomed to failure here by the very nature of the network. This is inevitable”. Many of the pioneers of open data, such as Tim Berners-Lee and Richard Stallman, have shared this vision.
Yet the world of finance is still predicated on the command-and-control model. A small number of giant banks control the market in commercial and retail lending, the insurance world is dominated by a handful of large players, who alone have access to the corridors of central banks and regulators.
Dean Buckner, a retired specialist at the Bank of England, explains how the secretive nature of regulation threatens, rather than supports, the stability of the financial system.
3. I will be speaking at the InsuranceERM conference on 27 February. Details here.
Elephant in the room: IFRS 17 and the matching adjustment
Solvency II was originally a market consistent regime for the regulatory balance sheet, and much of its original wording followed IFRS standards. This was since watered down by an addendum to Article 77 of the Solvency II directive, known as ‘Matching Adjustment’. IFRS 17 has a similar provision to Article 77, but has much stronger standards on market consistency. Will this lead to a divergence between regulatory and statutory balance sheets? Could there be a serious impact on UK insurers? The presentation will cover
- History of Solvency II and Matching Adjustment
- Corresponding provisions in IFRS 17
- Potential divergence of regulatory and statutory reporting
- Scenarios for reported solvency of UK insurers