IAIS Consults on Application Paper on Supervision of Control Functions
IAIS is consulting on a draft application paper on the supervision of control functions. The paper describes practices aimed at helping supervisors address issues related to the supervision of control functions as described in the Insurance Core Principles (ICPs) and the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). The paper supports observance of ICP 8 on risk management and control functions and has relevance with regard to the ICP 5 on suitability of persons and the ICP 7 on corporate governance. The comment period on this consultation ends on March 26, 2021.
The following aspects of the control functions of insurers are covered in the application paper
- Role of control functions
- Independence of control functions
- Stature of control functions
- Internal audit function
- Combination of control functions
- Outsourcing of control functions
- Group-wide control functions
In addition to the relevant literature and other publications, this application paper is largely based on the results of a survey among IAIS members of their supervisory practices; the survey identified challenges in supervision of control functions and effective supervisory practices for addressing these challenges. The application paper also considers the outcome of the Peer Review of Corporate and Risk-Governance relative to the standards set out in ICPs 4 (licensing), 5, 7, and 8. IAIS recognizes the need to further investigate the challenges to supervision of control functions identified from the survey, the Peer Review Process, and other sources; this paper looks to address these challenges by sharing relevant good supervisory practices.
Comment Due Date: March 26, 2021
Keywords: International, Insurance, Governance, ESG, ICP 8, ICP 5, ICP7, Internal Control Functions, Outsourcing, IAIS
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