Regulatory Authorities Remark on IAIS Reforms for Insurance Sector
FSB welcomed the finalization of the IAIS holistic framework for systemic risk in the insurance sector, for implementation in 2020. FSB also published remarks by the FSB Chair Randal K. Quarles, on Supervision in a Digital Era, at the Annual Conference of IAIS. Additionally, EIOPA welcomed the adoption of ComFrame, Insurance Capital Standard (ICS) Version 2.0, and the holistic framework for the assessment and mitigation of systemic risk in the insurance sector. However, OSFI notified that it did not support the ICS design proposed for a five-year monitoring period at the Executive Committee Meeting of IAIS.
OSFI notes that the standard in its current form is not fit for purpose for the Canadian market. Specifically, the proposed capital requirements for long-term products are too high to be compatible with the OSFI mandate of allowing Canadian insurers to compete and take reasonable risks. OSFI highlighted that,during the five-year monitoring period, OSFI will continue its work in trying to achieve an ICS for insurance companies that works for all jurisdictions. Canadian insurers will continue to be subject to the requirements of the robust OSFI capital frameworks for federally regulated insurance companies.
In light of the finalized holistic framework, FSB, in consultation with IAIS and national authorities, has decided to suspend Global Systemically Important Insurers (G-SII) identification from the beginning of 2020. In November 2022, FSB will, based on the initial years of implementation of the holistic framework, review the need to either discontinue or re-establish an annual identification of G-SIIs by FSB in consultation with IAIS and national authorities. FSB will receive from IAIS an annual update of the outcomes of the global monitoring exercise, including the IAIS assessment of systemic risk in the global insurance sector and the supervisory response to identified risks.
Related Links
Keywords: International, Europe, Americas, EU, Canada, Insurance, Reinsurance, ICS Version 2.0, ComFrame, G-SII, Systemic Risk, IAIS, EIOPA, OSFI, FSB
Featured Experts
Dr. Samuel W. Malone
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Related Articles
HKMA Announces Repayment Deferment Under Payment Holiday Scheme
HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.
ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal
The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.
MAS Announces Key Initiatives to Support Adoption of SORA
MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
PRA to Extend Temporary High Balance Coverage Amid COVID Crisis
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.
EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC
EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.
EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10
EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.
EC Sets Out Updated Technical Information for Solvency II Calculations
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.
US Agencies Issue Statement on Additional COVID-19 Loan Accommodations
FFIEC, on behalf of its members that include US Agencies such as CFPB, FDIC, FED, NCUA, and OCC, issued a joint statement that sets out prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers.
PRA Consults on Implementation of Certain Provisions of CRD5
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
