Mr. Aguilera reportedly noted that certain aspects of Solvency II are particular to the structure and operation of the European insurance markets, but he reportedly also stated that Mexico and other Latin American countries should be moving toward a Solvency II-type model characterized by three fundamental aspects: (1) a scheme of quantitative requirements based in risk and evaluation of technical reserves in conformity with market principles, where capital requirements are based not on general markets parameters but instead upon adequacy as measured by the levels and types of risk of the particular companies; (2) the reinforcement of corporate governance among companies and the power of the industry regulators; and (3) improved transparency and disclosure in the insurance market.
Although Mr. Aguilera reportedly conceded that Mexico has not performed any studies on the effect implementation of such Solvency II-type principles would have on local insurers, he stated that he believed that the overall result would be positive and a “win-win” for the industry.
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