The Study Of The Solvency Risk Supervision Of The Life Insurance Industry & The Suitable Scale Of The Guaranty Fund

Since 1997 to 2001 in Japan, there were 7 life insurance companies bankrupted due to insolvency, which eliminate the fairy of" The life insurance companies would never bankrupt". Under the information of The National Organization of Life and Health Guaranty Associations (NOLHGA), there were 74 life & health insurance companies were insolvency and got the NOLHGA's liquidation assistance from 1987 to 2009. Due to life insurance companies have to take the responsibility of the risk of claims or insurance payments after the life risk of accidents happened. Their operational condition would not only have relationship with their own benefits but also have influence with thousands of policyholders. Moreover, as important institutional investors, the insolvency of life insurance companies would attack all the financial system and the stable of social economics. Therefore, even though every country has different supervisory model and method, the core of it is still the solvency supervision of the life insurance companies.The conclusion of this research was according to reference records review, comparison and analysis, (1) the international tendency of financial risk management is getting into cross integration era. (2) The ERM of life insurance companies is the most important issue of the risk management research center at the moment. (3) The three pillars supervision of Solvency II in European Union would become the common structure and standard of the solvency risk supervision. (4) The Life Insurance Guaranty Fund is the final indemnity of the consumers. (5) The Life Insurance Guaranty Fund has to establish risk rates.As the development tendency of the integrity solvency supervision, the request of Economics Capital (EC) would possible to become an important tool of insurance supervision. This research uses the concept of EC to assess the most suitable size of The Life Insurance Guaranty Fund. Although it uses the simple asset model under the limited information, the assessment result is quite coincided with the actual condition.Hence, I would suggest the collection style of The Insurance Guaranty Fund could consider using EC as the risk indicator, according the risk level of the life insurance companies to collect guaranty fund. To cope with the development tendency of the integrity solvency liquidity, it would take into account the possibility of performance as well as the fairness of collection...