2019TGES保险公司风险管理高级研讨会20190810PPT2萧天 Risk Management Financial Regulation Perspective on Rule Based vs Principles Based Approaches

1,RiskManagementb.)Consistency;c.)Verifiability;d.)Comparability,etc.,Clarity:noambiguityforbothfinancialservicesindustryandregulatorswithregardtowhattheruleboundaryorthresholdare,howandwhenrulestobefollowedandcompliedwith.,Consistency:everyandeachentitiesunderregulationaresubjecttothesamesetofrulesandregulation.Requiredreportingorfilingremainsconsistencyfromperiodtoperiod,fromjurisdictiontojurisdiction,etc.,9,Rule-BasedRegulation,Strengthincludesa.)Clarity;b.)Consistency;c.)Verifiability;d.)Comparability,etc.,Verifiability:withclearinstruction,standardizedreporting,complianceordeviationcanbeverifiedandvalidated.,Comparability:consistentreportingmakespossibletocompareandevaluatewhatrulesworkandwhatnot,baseduponwhichchangesorupdatescanbemadeforimprovement.,Principles-BasedRegulation,Financialriskregulation,andtheapplicationandimplementationofwhich,isbaseduponasetofprinciplestoachievecommongoalsandobjectives.,Focuson“theoutcomethatmatters”,andprovidestheflexibilityastohowtoachievetheoutcome.,UnitedKingdomFinancialServicesAuthority2007:Prudentialregulationhas“aclearsetofstandards(i.e.,principles)withamoreflexibleimplementationapproach.”,11,Principles-BasedRegulation,Guidelinesintermsofgeneralguidance,andflexibleprocessandprocedures.,Provideregulatorsaswellasregulatedentitiesspaceforimplementation;andpermitregulatedentitiestomeettheirobligationsinamorecustomizedmanner.,Examples:SolvencyII-OwnRiskandSolvencyAssessment(ORSA),RuleBasedvs.PrinciplesBased,Rule-BasedPrescribedandspecificProceduralorientationCompliancefocusLackofflexibilityOnerulefitsallEffectivebutmaynotefficient,12,Whatarethestrengthandweaknessofthetwoapproachestoriskmanagementandregulation?,Principles-BasedGeneralandvagueOutcomefocusCooperationorientationImplementationFlexibilityManagementselfassessmentEfficientandmaynotlesseffective,RuleBasedvs.PrinciplesBased,Rule-BasedDoesnotrequirein-depthknowledgeinreviewandassessmentRequirecooperationandcollaborationdueprocessandtransparency-duringtherulemakingprocess,13,Principles-BasedRequirespecificknowledgeandexpertiseinreviewandassessmentCooperationselfassessment;ownmodel,mutualrecognition,etc.-duringtheimplementationprocess.,14,RuleBasedvs.PrinciplesBased,Otherconsideration:Divergenceand/orConvergenceCur