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Insurance contracts

Date recorded:

The joint Boards discussion on margins (risk adjustment and residual margin vs. the composite margin) spanned the two sessions on 17 and 18 May with an attempt to resolve the divergence between the two Boards. The Boards also had planned to discuss reinsurance and cross-cutting disclosure issues but these have not been debated yet.

The majority of the discussions on 17 May focused on Paper 3A (for risk adjustment) and Paper 3F (for composite margin). These discussions resulted in a general consensus amongst the Board members that the results (if not the presentation) of the two models was largely similar and that there were probably only a few areas or circumstances where significant differences would remain. In an effort to achieve convergence, the Boards directed the staffs to prepare a number of examples for discussion on 18 May. These examples were presented to the Boards on 18 May as Paper 3K.

Notes from the discussion on 18 May are available here.