Page 128 - Risk Management in current scenario

actuarial profession to submit the Financial Condition Report to the Board
and regulator.

Key Issues, Challenges, and Opportunities
Implementation of RBC is not free from challenges, different stakeholders
such as regulatory, insurance players, shareholders etc faces a different
level of challenges. The section below discusses some of the issues,
challenges, and opportunities that these stakeholders may face.

Regulatory Challenges

The Regulator is to stay proactive and ahead of the market in spotting
emerging risks along with collaborating with international agencies
in sharing knowledge and learning from each other.

The role of the Regulator is not just concerned about the protection of
the policyholders but also instilling confidence in the customers to have
faith in the financial system of the Country. The regulator is not also free
from challenges; they may find challenges putting in place all the
regulation along with monitoring mechanism. They have to ensure that
their own resources are in place, up to date with skills, systems etc.
Implementation of RBC is a key challenge for the regulator.

Impact on Market
There is a far-reaching impact on the insurance industry by the
implementation of RBC which may change the competitive landscape. The
RBC may split financially strong players with the weaker ones; in such
situation, consolidation in the market is not ruled out. In China, it was
observed that smaller players required more capital to support their
business model.

Such situation is addressed by altering the strategy of the Company for
investment, product, sales, and marketing. Players may select target
market based on their risk appetite and ability to withstand volatility
rather than present everywhere.

126 | Risk Management in Current Scenario