Pacific Life Re, the reinsurance arm of Pacific Life, has welcomed the Japan Financial Services Agency’s (JFSA) proposed guideline amendments to the Comprehensive Guidelines for Supervision of Insurance Companies as they promote the sound development of asset intensive reinsurance (AIR).
“While the final form of the guidelines has yet to be confirmed, we welcome this regulatory development. We see it as an important step that is expected to support the sound and sustainable evolution of the AIR market and, by extension, the broader savings and retirement markets in Japan,” PL Re stated.
The JFSA’s proposals refer to areas such as incorporating AIR related stress scenarios into stress testing, improved monitoring and analysis of reinsurers and collateral assets, and strengthening governance frameworks that reflect AIR related risks.
By fostering transparency, discipline, and resilience, these initiatives are designed to promote robust AIR practices through the industry.
After a period of significant expansion, the Japanese AIR market is transitioning into a phase where the quality of AIR and the accountability of its application are highly relevant.
This shift is expected to lead to increased transactions between insurers and reinsurers with strong risk management practices and more sustainable long-term growth.
“By partnering with leading life insurers in Japan and supporting them in achieving their strategic objectives, PL Re has played an active role in the healthy growth of Japan’s AIR market to date. Backed by Pacific Life, a mutual company with nearly 160 years of proven financial strength, stability, and reliability, we are committed to continuing to act as a trusted, long term partner to the Japanese insurance industry,” PL Re added.
