Dividends of Life Insurance Companies and the Solvency Capital Requirements
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The aim of the article is to discuss the impact of capital requirements set out in the Solvency II Directive on the amount of dividends paid by life insurance companies in Poland. The study was conducted with the use of an estimator of random effects of panel data of the entire market consists of 24 insurance companies. The data was taken from Solvency and Financial Condition Reports for the total period of Solvency II Directive obligatory use (2016–2018). Life insurance companies are required to apply a number of legal regulations that determine the amount of dividend paid. However, simultaneously they are exposed to numerous risks which are not covered by capital requirements. Our results indicate that the amount of dividend is strongly correlated with the capital requirements. Capital requirements determine the level of profits earned in life insurance companies. There is a negative correlation between the capital retention (outflow) and the financial position of the life insurance company.
The article was prepared during the project financed under the Bekker Programme by the Polish National Agency for Academic Exchange in 2019, Contract No. PPN/BEK/2018/1/00426/U/00001 (research scholarship at the Queensland University).
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