IAIS Issues Resolution of Comments on Paper on Corporate Governance
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
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.