IAIS Publishes Issues Paper on Implementation of TCFD Recommendations

The FSB TCFD had developed recommendations for voluntary climate-related financial disclosures in 2017. Then, Sustainable Insurance Forum (SIF) and IAIS released a joint issues paper on climate-change risks to the insurance sector in June 2018. As a follow-up to the 2018 issues paper, and recognizing the important role of the TCFD Recommendations in establishing a framework for climate-risk-related disclosures for the insurance sector, SIF and IAIS agreed to develop this second issues paper. The draft issues paper draws on the results of a SIF Survey on implementation of the TCFD recommendations and guidance, which was conducted during the first half of 2019. The paper also benefited from stakeholder input received during a workshop that took place in September 2019.

The paper begins with an overview of the relevance of the TCFD Framework to insurance supervision. It then summarizes the results of different efforts to assess levels of TCFD awareness and implementation within the insurance sector, based on the SIF Survey, as well as other sources of publicly available information. Next, the paper sets out a range of options for supervisory approaches, based on case studies (Annex 1) describing supervisory practices in twelve jurisdictions. SIF and IAIS recognize the value of developing further materials to support supervisors in their efforts to assess climate risks, including in relation to the Insurance Core Principles (ICPs). This paper is a step toward this objective and, as a next step, SIF and IAIS will develop an application paper on climate risk in the insurance sector.

Comment Due Date: February 05, 2020

Keywords: International, Insurance, Climate Related Risks, TCFD, Climate-Related Disclosures, ICPs, Sustainable Insurance Forum, Sustainable Finance, ESG, IAIS