International ERM Glossary

The International ERM Glossary is intended to provide users with a set of definitions that are in common usage around the world by actuaries, regulators and members of the insurance industry. The purpose in developing the glossary is to help provide a common understanding of the terms currently in use, as definitions and meanings have varied over time, and among practitioners. It can also be used as a training and educational tool for regulators.

The glossary can be consulted per letter, organization or grouping.

DISCLAIMER: The content of the International ERM Glossary has been compiled by the Joint ORSA Subcommittee of the Insurance Regulation Committee and the Enterprise and Financial Risk Committee of the IAA. This information has been collated and presented for educational and informational purposes to the members of the IAA and interested parties. The IAA assumes no responsibility for the accuracy, completeness, currency, reliability of the information in the International ERM Glossary or access to any information contained on any of the sources cited in the Glossary. The IAA, its employees and officers shall not be liable for any loss or damage, direct or indirect, which may arise or occur as a result of the use of or reliance upon any of the material in the International ERM Glossary.


TermGroupingOrganization or Jurisdiction Defining TermSource of DefinitionDefinition
Liquidity RiskRisk CategoriesChinaCIRC C-ROSS Conceptual FrameworkThe risk that an insurance undertaking is unable to obtain sufficient funds in a timely manner, or is unable to obtain sufficient fund at a reasonable cost in a timely manner, in order to meet the liabilities when they fall due.L
Liquidity RiskRisk CategoriesIAISIAIS Supervisory MaterialThe risk that an insurer is unable to realise its investments and other assets in a timely manner in order to settle its financial obligations as they fall due.L
Liquidity RiskRisk CategoriesInternational Actuarial AssociationIAA - Acturial Aspects of ERM for Insurance CompaniesLiquidity risk the risk associated with the ability to trade a particular asset quickly without incurring a lossL
Liquidity RiskRisk CategoriesInternational Risk Management InstituteIRMI TermsExposure to adverse cost or return variation stemming from the lack of marketability of a financial instrument at prices in line with recent sales.L
Liquidity RiskRisk CategoriesThe European Economic AreaCEA Solvency IIThe risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.L
Liquidity RiskRisk CategoriesThe European Economic AreaSolvency IIThe risk that insurance and reinsurance undertakings are unable to realise investments and other assets in order to settle their financial obligations when they fall due. (Solvency II Directive art. 13(34))L