Study On The Suitability Of The Dynamic Solvency Supervision

The theme of this paper is the suitability of the Dynamic Solvency Supervision.By reviewing the concepts,research methods and other theoretical basis on the Dynamic Solvency Supervision,this paper simulates the benchmark boundary of the Dynamic Solvency Supervision from the perspective of microeconomics of regulatory benefits and costs.Then based on the data since using this system,this paper tries to adopt a Two-tier Stochastic Frontier Model to measure the relative strength of bargaining power of both sides from three dimensions—species,sizes and ownership of insurance companies.Relative to the previous studies,this paper estimates the suitability of the current solvency supervision with clear standards and accurate data.The results confirm previous researches that the current dynamic supervision approach is effective in general.Besides,this paper also finds some new problems which need to be improved: both the Insurance Regulatory Commission and state-owned life insurance companies influence the supervision effectiveness,but the former has a stronger influence ability which makes the actual solvency margin ratio higher than the equilibrium value;the current dynamic supervision approach has different impacts on different companies;the current regulation has a weak supervision on the large state-owned life insurance companies.So,we should strengthen the rationality of regulation policy,and carry out classified supervision to make up the weakness in the current supervision approach.