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
EBA Proposes Guidelines for Establishing Intermediate Parent Entities
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.