IAIS published a report that provides the aggregate assessment results and observations from the peer review process on the thematic topic of mandate for supervisors and supervisory powers. The peer review process covered the IAIS Insurance Core Principle (ICP) 1 on objectives, powers, and responsibilities of the supervisor and ICP 2 on supervisor. The assessment covers ICPs 1 and 2 that were adopted in October 2011. This report highlights useful practices reported by IAIS members. This report also includes a description of the peer review process (Annex 1), a list of the participating IAIS members (Annex 2) and a list of aggregated ICPs 1 and 2 results by IAIS region (Annex 3). IAIS also published a questionnaire related to the peer review process.
A total of 72 authorities participated in the peer review process. Out of this, 19 responses came from the IAIS members in FSB jurisdictions and 32 responses came from the IAIS members in Organisation for Economic Co-operation and Development (OECD) jurisdictions. The results of the peer review process show that general awareness and observance of ICPs 1 and 2 is high. Compared to the last assessment results for ICPs 1 and 2 (a self-assessment and peer review in 2012), IAIS observes a positive trend to a higher level of observance:
- For ICP 1, all 72 members have been assessed as either Observed (42 members) or Largely Observed (30 members). This is a positive trend compared to the self-assessment and peer review of 2012, when only 24 out of the 82 members observed ICP 1. Of the four standards in ICP 1, Standard 1.4 on correction powers in legislation shows the lowest level of observance. Based on answers provided, the IAIS Expert Team feels that jurisdictions may have found this standard difficult to interpret.
- ICP 2 was Observed or Largely Observed by the majority of members (70 members). The IAIS Expert Team notes that only 10 members Observed the standard (14%), 60 members (83%) Largely Observed it, and two members (3%) Partly Observed it. Of the 13 standards in ICP 2, Standard 2.6 (on regular review of procedures and consultation) has the lowest level of observance and Standard 2.11 (on resources) has the second lowest level of observance. The IAIS Expert Team also identified room for improvement in Standards 2.4 (on undue interference), 2.5 (on clear and transparent procedures), and 2.9 (on confidentiality obligations).
In addition to simply assessing compliance, the IAIS Expert Team also approached respondents with additional questions and asked for examples of the implemented supervisory approaches or “useful practices” to gather ideas on which practices helped them reach a good level of observance. The Expert Team was particularly interested in examples of where observance can present challenges. The report includes a synthesis of useful practices for situations where observance can present challenges. These practices provide insights on how IAIS members who participated in the peer review process effectively implement the standards of ICPs 1 and 2. IAIS members may consider the useful practices described in this report as a tool to better understand and effectively implement these standards. As a new element of the peer review process, the information on overall observance levels for ICPs 1 and 2 of each member is also available; however, this information is not publicly available, is confidential, and is disclosed to IAIS members only.
Keywords: International, Insurance, Peer Review Process, ICP 1, ICP 2, Observance of ICP, Insurance Supervision, IAIS
Previous ArticleMAS Consults on Regulatory Approach for Payment Token Derivatives
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI published the key findings of a study on third-party risk management.
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.