Discuss (b) solvency supervision

The regulatory ladder (the exam's history): (i) the free-market beginnings (the Lloyd's-era self-regulation — the market's own discipline); (ii) the solvency scandals' lesson (the insurers' collapses — the policyholders' ruin: the state's entry justification); (iii) the 19th-early-20th century statutes (the licensing-and-deposit systems; the UK Assurance Companies Act-line); (iv) the post- WWII intervention era (the price-and-product controls; the state monopolies' faces); (v) the liberalisation-and-modern-regulation era (the 1980s-90s: the market's opening + the sophisticated supervision — the solvency's risk-based capital; the market-conduct regulation); (vi) the international standards (the IAIS's principles — the global supervisor's craft; the solvency regimes' modernisation). The regulation's rationale: the information-asymmetry (the consumer's ignorance — the complex product's understanding gap); the insolvency's systemic risk (the long- term promise's fragility); the public-good faces (the compulsory insurances — the motor third- party); the trust-maintenance (the market's confidence as the business's essence).