- versus Microprudential Regulation
- Common Exposures
- Liquidity modeling
- Mass lapses
- macroprudential surveillance
- Systemic amplifiers
- NAIC Liquidity Stress Testing (LST) Framework
- 269 For instance, in 1991 six major life insurers, each with over $4 billion in assets, failed as a result of their common exposures to commercial real estate and junk bonds.
See Scott Harrington, Policyholder Runs, Life Insurance Company Failures, and Insurance Solvency Regulation, 15 Cato Rev Bus & Govt 27, 27 (1992).
2014 - LR - Regulating Systemic Risk in Insurance - Daniel Schwarcz and Steven L. Schwarcz -73p
Contagion is often characterised by a transmission in the form of a liquidation of assets and is therefore also linked to the liquidity position of the insurer.
- In extreme cases, a large part of the insurance sector could start partly or fully selling certain asset exposures at a distress price, i.e. a fire sale of assets.
- Such fire sales could be amplified by, for example, mass lapses, procyclical behaviour or the liquidity needs of insurers with a high exposure to insurance products with potential systemic features and/or a large activity in certain derivatives markets characterised by margin calls. (p14)
2018 11 - Macroprudential provisions, measures and instruments for insurance - European Systemic Risk Board