Inoncillo, M. J. D. (2016). Regulatory framework for solvency and risks assessment for insurance brokers (Unpublished master's thesis). Public Management Development Program, Development Academy of the Philippines.

Public Management Development Program Middle Managers Class Batch 10 Thesis (MMC)--Development Academy of the Philippines.

This Re-entry Project (ReP) seeks to address the lack of regulatory framework for the solvency and risks assessment for Insurance Brokers (IBs). To date, IBs are being assessed by their compliance with net worth requirements. Given the requirements of the international standards (Insurance Core Principle 18: Intermediaries) and the businesses the IBs engaged in, a gap in the current methodology exists. To address the problem identified and its long term effects, a regulatory framework, through a Circular Letter (CL), was developed and submitted by the Project Team to the Insurance Commissioner. The objective of the CL is to effectively assess the solvency and risks being handled by an IB. In addition to the CL, a Market Assessment Report was also prepared and served as the main support for the provisions contained in the CL. The first part of the implementation was the Preparatory Phase. At this stage, the Project Team was created and conducted the internal meeting and planning to determine how the expect outputs will be delivered. Also included at this phase was the dialogue and consultation with the IB industry. The dialogue resulted in the gathering of observations and comments on the proposed changed of regulation. The initial observations were important on the determination of the provisions that were included on the CL. The next phase was the Assessment and Scanning Phase. This phase enabled the Project Team to conduct a review of the current regulations and benchmarked the same with those regulations applied in other jurisdictions such as Singapore, Hong Kong and Bhutan. The main output at this phase was the Market Assessment Report. The Market Assessment Report was submitted by the Project Team to the Insurance Commissioner on 06 June 2016. The report contains information on the current rules, the applicable international standards, the regulations applied in other jurisdictions, the proposed design of the framework and other considerations such as establishing rules on Standard Broker Agreement and introduction of Unified Chart of Accounts. The last phase included in the implementation of the ReP was the Development Phase. At this phase the Project Team drafted the CL with a subject "Solvency and Risk Assessment". The sections of the CL include the objectives and scope, solvency design, solvency and risk requirements, reporting requirements and the implementation and effectivity. In finalizing the CL submitted to the Insurance Commissioner, the Project Team considered all the aspects relevant to the operations of an IB. In order to sustain the ReP there are steps that the Insurance Commission need to undertake after the three (3) month ReP implementation period. This can be broken down into two (2) parts. The first part includes the exposure of the draft CL to the IBs industry and conduct of QIS. This will enable the IC to include the comments and observations on the CL based on the results of the exposure and QIS. The second part will include the regular review of the regulations and increasing the reliance on external audit reports. The regular review will ensure the IC that the CL is still viable given the trends and developments in the IBs industry. The reliance on external audit reports will increase the auditor's accountability and will allow the IC to focus more on issues that need immediate attentions and resolutions.