Final version of China Risk Oriented Solvency System (C-ROSS) announced
The China Insurance Regulatory Commission has announced the final version of the new risk-based solvency framework, China Risk Oriented Solvency System (C-ROSS).
Further to our September 2014 article, the Chinese regulator, China Insurance Regulatory Commission (CIRC), announced the final version of the new risk-based solvency framework, China Risk Oriented Solvency System (C-ROSS), on 15 February 2015.
The transitional period commences immediately, requiring Chinese insurance companies to prepare two sets of solvency reports based on both current and C-ROSS requirements. This system of dual-reporting will continue until the official implementation date of C-ROSS, yet to be determined by CIRC.
C-ROSS has three pillars covering quantitative capital requirements, qualitative supervisory requirements, and market discipline/transparency requirements, and requires enhanced risk management controls and processes for local insurers. It has implications for both Lloyd’s Insurance Company China Ltd (Lloyd’s China) and for Chinese business written on a cross-border basis by the Lloyd’s market around the world.
Lloyd’s China has already been working to align its risk management framework with the requirements of C-ROSS, and Lloyd’s will continue to consider the implications and options for cross border and onshore business once a translation of the finalised requirements is available.
Further guidance will follow in due course. In the meantime, if you have any questions please contact: