Report of the Working Party on Equalization Reserves

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This paper is largely a reintroduction to the subject which was last tackled by the General Insurance Study group eleven years ago. We do, however, raise questions here which are topical at the present time. However, we have found it impossible to answer all the questions here. Therefore there are many problems left for future working parties to grapple with. In addition, we have looked at current market practice, and in particular at the impact of the 1990 Credit Insurance Regulations, through a market survey which we carried out in July of this year. We also studied qualitatively some of the effects of different equalization reserve mechanisms by means of a simulation model.