he main focus of prudential regulation and supervision of insurers is usually considered to be the protection of the rights of policyholders. This includes oversight of the continuing ability of insurers to meet their contractual and other financial obligations to their policyholders. The nature of insurance business implies the establishment of technical provisions, and the investment in and holding of assets to cover these technical provisions and a solvency margin. The interplay between the characteristics of the insurance liabilities and the assets backing those liabilities is one of the most important sources of risks to insurers and hence.
