To ensure that the solvency of non-life insurers and reinsurers reflects both the retained risks of their natural disaster lines and the credit risk associated with reinsurance losses payable, the FSC in 2015 began studying the possibility of incorporating natural disaster risk into the current risk-based capital system. On 15 October 2020, the FSC invited nonlife insurers and reinsurers to discuss the matter, and a consensus was reached.

 

The new natural disaster risk capital charge to be introduced from end-December 2020 will prompt non-life insurers and reinsurers to strengthen their ability to assume natural disaster risk and attach importance to natural disaster risk management, and will guide them to gradually move toward compliance with international standards. Also, catastrophe perils, as defined in the Insurance Capital Standard (ICS), also include terrorist attacks, communicable diseases, and credit guarantees. This is still somewhat broader than what the FSC is now adding to the scope of natural disaster risk, so the FSC will continue to rely on the results of field testing of the New Generation Insurance Solvency Regime to plan a phased introduction of an ICS catastrophe risk program, in the hope that Taiwan can converge gradually and stably with the international regime.