The Swiss financial regulator wants insurers including Zurich Insurance Group AG and Swiss Re Ltd. to report on liquidity management practices to better understand their capital strength.
Insurers are required to give a “structured” report of their liquidity risks by the end of April 2013, the regulator said in a circular on its website today. The reforms follow recommendations of the International Association of Insurance Supervisors, Finma said.
Switzerland introduced new solvency regulations for insurers in January last year to align insurers’ risks with the capital they hold. Insurers in the European Union will be faced with similar regulation from January 2014 .
“Alongside capital management, liquidity management provides a holistic view of capital strength and is a central element of financial corporate governance,” the regulator said. “It means the ability of a company to meet due payment obligations in full and in time.”