Capital regulations for life insurance companies in Asia are complex, diverse, and continually evolving. Regulatory developments can have significant implications for insurers’ business models, capital management, product strategy, investment decisions, and risk governance. Across the region, many jurisdictions are either enhancing existing risk-based capital (RBC) frameworks or introducing them for the first time. These reforms increasingly reflect a desire for greater alignment with international developments, including the Insurance Capital Standard (ICS), International Financial Reporting Standard 17 (IFRS 17), and other global capital frameworks.
The report is the eighth edition covering the existing or upcoming capital regimes in 16 markets in Asia, and other frameworks that impact the balance sheets of some Asian life insurers, such as ICS, the Bermuda Solvency Capital Requirement, and the Cayman Islands RBC. The report also makes reference to Solvency II, Solvency UK, Canada’s Life Insurance Capital Adequacy Test, and the RBCs in the United States and Australia, as well as typical approaches used by large companies in Asia under IFRS 17.
Most insurance markets in Asia now follow some form of RBC regime, although some, including India and Vietnam, still use a European Union Solvency I type of approach. In some markets, insurance regulators have reviewed, or are reviewing, the capital regulations, with new rules implemented in Japan, Taiwan, and Brunei in 2026. New rules are also expected for Macao in 2028. In addition, Malaysia is looking to upgrade its existing RBC requirements, while updates to the capital rules in Thailand are still under discussion. India is also going through the process of moving from the existing Solvency I capital regime to India RBC, but the exact timeline has not yet been communicated.
The report covers the following key topics.
- Overview: Markets across the region.
- Moving towards an economic balance sheet framework: Material differences exist.
- Discount rate: Market consistency and illiquidity premium.
- Capital requirement modules and submodules: Broadly consistent across RBC regimes in Asia, but underlying parameters differ.
- Pillar 2: Enhancement and alignment of qualitative requirements.
- Comparative analysis: Key capital results across Asia and impact of new RBC regimes on life insurance companies.
- Potential impact of changes in capital regimes: Rethinking the risk-reward trade-off.
Download the summary report (PDF).
Thank you for your interest in our research. If you would like to request a copy of the full report or discuss the capital frameworks in any of the markets covered in more detail, please contact the authors or your usual Milliman consultant.