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Magnitude control of technical reserves in Finland

Published online by Cambridge University Press:  29 August 2014

Erkki Pesonen
Erkki Pesonen*
Affiliation:
Helsinki
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Extract

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This paper deals with some requirements put forward by the Finnish Supervisory Service on technical reserves mainly for solvency reasons. Consequently only one but nevertheless an important aspect of solvency problem is touched upon. The solvency question in its entirety is discussed in a paper of Dr. Pentikainen at this same colloquium.

According to the instructions of the Supervisory Service, given by virtue of the Insurance Companies Act, insurance companies are obliged to calculate a so-called equalisation reserve in a specific way. Simplifying slightly, this equalisation reserve is that part of the technical reserves which exceeds the premium reserve and the claims reserve calculated according to classical actuarial principles; that is to say, the present value of the expectation value of the net insurance liabilities. The Insurance Companies Act calls for this reserve because conventional technical reserves do not take into account the random feature of claims amount.

Type
Astin Colloquium 1965 Lucerne Subject three
Information
ASTIN Bulletin: The Journal of the IAA , Volume 4 , Issue 3 , July 1967 , pp. 248 - 251
Copyright
Copyright © International Actuarial Association 1967

References

page 250 note 1) Since the proof of this proposition is known only in a special case the term hypothesis is more appropriate. More details are found in the paper “On the Calculation of the Generalised Poisson Function” by the present author.