Featured Product

    IAIS Consults on Application Paper on Resolution Powers and Planning

    November 09, 2020

    IAIS is consulting on an application paper that is intended to provide guidance on supervisory practices for resolution powers and planning. The paper provides guidance on the application of Insurance Core Principles on exit from the market and resolution (ICP 12) and on supervisory cooperation and coordination (ICP 25), including the ComFrame standards integrated therein. The paper discusses the objectives and concepts of resolution as well as concepts around point of non-viability and entry into resolution. The paper also provides further guidance and practical examples around resolution powers, resolution planning, and resolvability assessments. The consultation period on the application paper ends on February 05, 2021.

    This paper and most of its concepts are relevant to the business of primary insurers and reinsurers as well as to the insurance legal entities and insurance groups. This application paper aims to:

    • Provide guidance to supervisors and/or resolution authorities on the practical application of resolution powers as well as on cooperation and coordination between authorities when planning for, and exercising, such powers
    • Provide guidance on resolution planning, which may be beneficial to supervisors, resolution authorities, and/or insurers, depending on the circumstances within a jurisdiction
    • Provide examples to illustrate the application of standards and guidance relevant to resolution
    • Address issues that were identified during the development of supervisory material in ICP 12 and ComFrame, including the feedback received from IAIS members and stakeholders

    The issues that were identified during the development of supervisory material in ICP 12 and ComFrame, include guidance and clarifications on expectations for resolution planning; explanations and examples of the application of resolution powers; practical application of proportionality in the case of resolution; and role of policyholder protection schemes in resolution. This paper discusses the role that a policyholder protection scheme, if established within a jurisdiction, may have in relation to certain resolution powers as well as in relation to the resolution authority. It does not, however, aim to provide a comprehensive overview on the role of policyholder protection schemes in resolution. The paper is part of a wider project, whereby IAIS is developing supporting material on recovery and resolution. An earlier paper on recovery planning was published in 2019.

    The paper also provides guidance to certain additional elements that are set out in ComFrame, which focuses on internationally active insurance groups, or IAIGs, only, in particular the requirements related to resolution planning, resolvability assessments, and crisis management groups (CMGs). The guidance in this areas is thus intended to be particularly useful for supervisors and/or resolution authorities of IAIGs where prior planning for resolution and cross-jurisdictional coordination may be beneficial. While certainly important for resolution, issues related to valuation and funding in resolution have not been discussed in detail. However, these issues are closely linked to ICPs 14 and 17 (Valuation and Capital Requirements), which are scheduled to be revised in the coming years (during the monitoring period of the Insurance Capital Standard Version 2.0).

     

    Comment Due Date: February 05, 2021

    Keywords: International, Insurance, Reinsurance, Resolution Planning, Resolution Framework, ICP, ComFrame, Proportionality, Resolvability Assessment, IAIS

    Related Articles
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A Updates in February 2021

    The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to ten questions.

    February 26, 2021 WebPage Regulatory News
    News

    ESMA Releases Schema and Instructions for Securitization Reporting

    ESMA updated the set of questions and answers (Q&A), along with the reporting instructions and an XML schema for the templates set out in the technical standards on disclosure requirements, under the Securitization Regulation.

    February 26, 2021 WebPage Regulatory News
    News

    EU Rule Amends Requirement for European Single Electronic Format

    EU published Regulation 2021/337, which amends the Transparency Directive (2004/109/EC), regarding the use of the single electronic reporting format for annual financial reports.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6637