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
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
HKMA Endorses Industry Guidance to Support LIBOR Transition
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
FDIC Announces Winners of Tech Sprint to Reach Unbanked Consumers
The tech lab of the Federal Deposit Insurance Corporation (FDIC) selected three winning teams in a tech sprint designed to explore new technologies and techniques to help banks meet the needs of unbanked consumers.
MAS Consults on Capital and Reporting Requirements for Market Risk
The Monetary Authority of Singapore (MAS) launched a consultation on the standards for market risk capital and the associated reporting requirements for banks incorporated in Singapore.
PRA Letter Sets Out Findings on Reliability of Regulatory Reporting
PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.
APRA Connect to Go Live; APRA to Reduce Reliance on CLF
The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.
FED Paper Explores Fintech Partnership Dynamics in Community Banks
The Federal Reserve System (FED) published a paper describing the landscape of partnerships between community banks and fintech companies.
FDIC Selects Four Vendors for Next Phase of Rapid Prototyping Pilot
The Federal Deposit Insurance Corporation (FDIC) has chosen four companies—Novantas Inc, Palantir Technologies Inc, PeerIQ, and S&P Global Market Intelligence LLC—to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis.
PRA Consults on Requirements to Identify Material Risk-Takers
The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime.
ESA Report Points to Elevated Credit and Cyber Risks in Wake of Crisis
The Joint Committee of European Supervisory Authorities (ESAs) published its second 2021 joint risk assessment report for the financial sector.
