Contents:
Resolution powers and planning: IAIS application paper
The International Association of Insurance Supervisors (IAIS) has published an application paper on resolution powers and planning. In this paper, the IAIS provides supporting materials for supervisors and resolution authorities on the practical application of resolution powers, as well as on cooperation and coordination between authorities when planning for, and exercising, these powers. It also provides support on resolution planning, which may be beneficial to both authorities and insurers. In particular, the paper provides background for the application of insurance core principle (ICP) 12 (Exit from the Market and Resolution), including the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) standards and guidance. It is also relevant to ICP 25 (Supervisory Cooperation and Coordination), including the ComFrame standards and guidance related to crisis management planning. In addition, the paper aims to address issues that were identified during the development of supervisory material in ICP 12 and ComFrame.
Supervising control functions: IAIS application paper
The IAIS has published an application paper on supervision of control functions. In this paper, the IAIS describes practices aimed at helping supervisors address issues relating to supervising control functions, as described in the ICPs and ComFrame. In particular, it supports the observance of ICP 8 (Risk Management and Control Functions), and is also relevant to ICP 5 (Suitability of Persons) and ICP 7 (Corporate Governance). This paper is largely based on the results of a survey of the experiences and supervisory practices of IAIS members. This survey identified challenges in supervising control functions and effective supervisory practices for addressing these challenges.
Supervisory colleges: IAIS consults on draft application paper
The IAIS has launched a consultation on a draft revised application paper on supervisory colleges. The application paper on supervisory colleges, first published in October 2014, provides guidance on best practices, together with examples, throughout all phases of the supervisory college process, explaining the work of supervisory colleges and the role and involvement insurers may have in them. It has been updated to reflect subsequent developments of IAIS supervisory material, including revisions to insurance core principle (ICP) 3 (Information Sharing and Confidentiality Requirements) and ICP 25 (Supervisory Cooperation and Coordination) and the adoption of ComFrame, which took place in November 2019. Further amendments refocus the content on those aspects of supervisory college operations that are most relevant for the insurance industry.
The deadline for comments on the proposed revisions is 24 August 2021.
The IAIS will hold a public background session on the two papers via webinar on 30 June 2021.
Culture: IAIS consults on draft issues paper
The IAIS has launched a consultation on a draft issues paper on insurer culture. The draft issues paper explores the concept of insurer culture as a point of intersection for prudential and conduct risks and includes selected examples to illustrate the broader role of culture in this regard. As well as exploratory observations on the importance of insurer culture, it identifies the various ICPs that explicitly refer to supervisory expectations regarding insurer culture. The aim of the paper is to help supervisors identify and address prudential and conduct issues in a more timely and effective manner, with a view to potentially reducing the occurrence of widespread misconduct and possible financial and consumer harm. Given the complexity of culture as a concept and the multidimensional elements that influence the cultural make-up of individual insurance businesses, the paper is not intended as an exhaustive analysis of the issues nor does it develop detailed supervisory guidance.
The deadline for comments on the draft paper is 23 August 2021.
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Authored by Yvonne Clapham
