MECHANISMS FOR ENSURING FINANCIAL STABILITY AND SOLVENCY IN INSURANCE COMPANIES

Abstract

 Financial stability and solvency are fundamental pillars of a sustainable insurance system. Insurance companies operate by collecting premiums and assuming risks, which requires maintaining sufficient capital, reserves, and liquidity to meet future obligations. In Uzbekistan, the rapid development of the insurance market has increased the importance of strengthening financial stability mechanisms and improving solvency supervision. This study examines the key mechanisms used to ensure financial stability in insurance companies, including capital adequacy requirements, technical reserves, risk-based supervision, reinsurance arrangements, and digital financial monitoring systems. Using regulatory analysis and comparative international practices, the research identifies challenges such as limited actuarial capacity, insufficient risk modeling tools, and evolving market risks. The findings indicate that adopting risk-based capital frameworks, strengthening regulatory oversight, and integrating digital monitoring systems are essential for enhancing insurer solvency and protecting policyholders. The study concludes that a comprehensive and modern solvency framework is critical for sustainable growth of Uzbekistan’s insurance sector.