ERM frameworks [29]

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Bullet points include: Broad international movement towards principles-based regulation. Insurance regulators are among innovators here. Firms required to follow broad principles of behaviour rather than detailed rules. E.g. Canada: has used such an approach for some years now, Switzerland: introduced Swiss Solvency Test (SST) based on stochastic modelling in 2006, UK: FSA principles apply to all firms that they regulate, under discussion in USA. Failure to follow principles leads to penalties or other supervisory interventions. Principles can be thought of as involving broad relatively imprecise rules. Including conduct of business and governance as well as capital requirements

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