What’s new: In brief (July 05, 2004)

The U.K. Financial Services Authority (FSA) has published its rules for the capital requirements on non-life insurers and reinsurers, as well as with-profits funds for life insurers. The rules, first proposed last July, apply risk-based criteria to solvency requirements. Part of the impetus comes from the high-profile failure of London market underwriters, and the regulators desire to get a firm grip on solvency in that market. FSA insurance leader David Strachan says non-life insurers will meet European Union solvency requirements, but also provide a risk-based enhanced capital calculation privately to the FSA.

Taiwan is recovering from the lash of Typhoon Mindulle, which hit the island at tropical storm intensity this past weekend. According to Guy Carpenter’s Instrat CAT-I report, the storm caused at least 21 deaths and about US$400 million in damage. Torrential rains led to flooding and mudslides in many areas, with some villages reporting rainfall of more than 1,000 mm. The Philippines was also hard hit by the storm, with at least 32 dead and 11 missing.

Munich Re has released its second-quarter 2004 edition of Schadenspiegel with a recap of last year’s California wildfires. Also contained in the report is coverage of several smaller claims incidents, the most interesting of which may be the grounding of a ship sailing out of Cork, Ireland. The incident occurred when the chief officer got his pants caught on a foot lever and was knocked unconscious. The ship went to ground off Land’s End, England, and although the crew was airlifted to safety, the ship was unsalvageable.