Methodology of the Early Warning System in Insurance Companies
|Author:||Mgr. Martin Hrdý|
|Year:||2002 - winter|
|Leaders:|| prof. RNDr. Jan Ámos Víšek CSc.
|Work type:|| Finance and Banking
|Awards and prizes:|
|Abstract:||This edition describes existing systems of insurance supervision with regard to solvency supervision and equalisation reserve. Solvency margin is assumed to be the main instrument guaranteeing Insurance Company to meet its obligations and commitments in time. Equalisation reserve is, on the other hand, expected to set up the system, which ensures the long time existence of the Insurance Company on the market. Control of solvency margin and equalisation reserve is the basis of the early warning system.
The early warning system, which is the main goal of this work, contains the way of supervision concerning the possibility to identify financial difficulties before they cause real problems. Generally speaking, this analysis provides solution of problems "ex-ante", contrary to usual on-site and off-site inspections, which solve the possible problems more or less "ex-post".
In different parts of the world different early warning systems are used. For our purpose, the system used in Finland was selected, together with the system used in the Czech Republic (based on ES directives). In conclusion to this task, these two systems were compared each to other and the main