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Insurance: Just Part of the Financial Sector? [16]

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Bullet points include: Banks, Insurers. Assets: Often IFRS, bank loans deemed financial instruments, IAS 39, loan provisioning generally retrospective, IFRS 9 amortised cost or fair value, Solvency II uses market consistent, i.e. fair, values (and less reliance on general purpose accounting). Liabilities: Also typically at amortised cost or fair value,Transfer/settle cost, approximated by best estimate + risk margin or MV of replicating portfolio, more prospective. Own credit risk: Basel III will effectively disallow benefit previously available under Basel II, No. More retrospective (hence stable in the short term) for banks than insurers. Relevant to design of counter-cyclical elements. Although counter-cyclical versus what?

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