IAIS Publishes Newsletter for February 2020

The newsletter highlights that during the monitoring period, ICS will be used for confidential reporting and discussion among supervisors in supervisory colleges. The expectation regarding participation in the monitoring period is that, at a minimum, the same groups that participated in ICS field testing exercises will participate in confidential reporting, with the number of additional participants increasing over time. In addition to the feedback from supervisors, IAIS will also consider feedback from stakeholder engagement, a public consultation, and the results of an economic impact assessment—all of which could result in changes to ICS Version 2.0. During the monitoring period, IAIS intends to maintain the same level of engagement with stakeholders that it had during field testing.

The Capital, Solvency and Field Testing Working Group also met in Basel from February 04-06 to discuss the monitoring period and the Level 2 document for ICS Version 2.0 for the monitoring period, based on parent committee decisions in November. An update was provided on the work plan for the aggregation method additional data collection. The group will next meet in Tokyo on March 24-26, 2020 to discuss the confidential reporting package for ICS Version 2.0 for the monitoring period and the 2020 aggregation method additional data collection. Confidential reporting of ICS Version 2.0 for the monitoring period and the aggregation method additional data collection will both be launched in late April 2020, with a launch workshop in Basel on May 19.

The newsletter highlights that cyber risk underwriting has a huge potential and, therefore, the IAIS Executive Committee has established a small group that is mandated to develop proposals on where IAIS could focus its efforts. This small group will present the findings of its work to the Executive Committee in February 26, including recommendations for a future work plan in this area. Additionally, the Financial Stability Institute cross-sectoral policy implementation meeting on climate risk assessment in the financial sector took place on February 20-21, 2020 in Basel. The meeting consisted of six panel sessions related to climate risk assessment, ranging from more strategic issues such as sequencing of regulatory and supervisory measures to technical discussions such as climate risk modeling. Views were also exchanged on how existing risk management requirements on banks and insurers can be tailored to capture their climate risk exposures. Moreover, the Accounting and Auditing Working Group will meet on February 26-27 in Basel to discuss, among other issues, the proposed amendments of IASB to IFRS 17 and audit quality issues related to the implementation of IFRS 17.

Keywords: International, Insurance, Newsletter, ICS, ICS Version 2, Cyber Risk, IFRS 17, Insurance Contracts, Cyber Underwriting, Climate Change Risk, ESG, IAIS