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
Related Articles
EBA Sets Out Standards for Pillar 3 Disclosures of ESG Risks
The European Banking Authority (EBA) published the final draft implementing technical standards on Pillar 3 disclosures on environmental, social, and governance (ESG) risks.
EBA Proposes Guidelines on Remuneration Benchmarking, High Earner Data
The European Banking Authority (EBA) proposed to update the guidelines on the data collection exercise on high earners and the remuneration benchmarking exercise under the Capital Requirements Directive (CRD).
MAS Issues Updates on Its Activities: Ravi Menon Becomes NGFS Chair
The Network for Greening the Financial System (NGFS) announced the appointment of Mr. Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), as its new Chair for a two-year term.
CBIRC Issues Rules on Related-Party Transactions and Outsourcing Risks
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules on related-party transactions and outsourcing risks.
OSFI Issues Results of Pilot on Climate Risk Scenario Analysis
The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.
EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR
The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).
BIS Tests CBDC with Banks; FIS Examines Tech Firm Licensing Regime
The Bank of International Settlements (BIS) announced successful test integration of wholesale central bank digital currency (CBDC) settlement with commercial banks, as part of the Project Helvetia.
ECB Issues Opinions on Green Bonds Standard and CRR Proposals
The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.
ESRB Explores Policy Response to Risks Arising from Digitalization
The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.
HKMA Consults on FIRO Code, Revises Policy on Foreign Exchange Risk
The Hong Kong Monetary Authority (HKMA) is consulting on the draft Financial Institutions (Resolution) Ordinance (Cap. 628), or FIRO, Code of Practice chapter on liquidity and funding in resolution, until March 14, 2022.
