The Assessment of Solvency

Effectively, a non-life insurance concern may be considered to be solvent if the supervisory authorities of the country or countries in which it operates allow it to continue operating. It is of no avail to claim that, by some other criterion, the concern may be considered to be solvent; it is by reference to the controls imposed by supervisory authorities that the concern must operate. For this reason, it is apposite to consider the principles of solvency assessment in the context of the financial statements and other documents generally available to supervisory authorities, as distinct from the theoretical mathematical concepts underlying insurance operation.