IAIS published its resolution of comments on the draft application paper on proactive supervision of corporate governance in insurance sector. IAIS had issued the draft application paper on November 08, 2018 and the consultation period ended on December 17, 2018. The draft paper on proactive supervision of corporate governance sets out good practices related to the organization and functioning of the supervisor. The aim is to raise awareness of, and to address, the organizational, cultural, and procedural challenges faced by supervisors in detecting problems in corporate governance and taking appropriate steps at an early stage.
The application paper discusses how the supervisor's own organization, culture, and processes should support proactive supervision. This encompasses the supervisor as well as its management team and staff. The paper provides a non-exhaustive list of early warning indicators—yellow and red flags—that may signal the need for investigation and, potentially, further action. Finally, the paper explains how effective communication by the supervisor with both insurers and the wider public can promote proactive supervision.
The application paper recognizes that there is no one-size-fits-all approach to proactive supervision. There are different steps that supervisors may decide to take, both organizational and procedural, direct and indirect, separately or together, to foster proactiveness. Whichever steps are taken, proactive supervision should be conducted proportionately to the issues identified, using an approach customized to the circumstances, including relevant supervisory objectives, laws, and regulations. Whether the supervisor has, or should have, certain legal powers to foster proactive supervision is outside the scope of the paper. Also external developments, which are outside the control and influence of the supervisor, fall outside the scope of the paper.
Keywords: International, Insurance, Corporate Governance, Operational Risk, Responses to Consultation, IAIS
Previous ArticleECB Publishes Results of the 2018 Stress Test for Banks
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.
EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.
The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.