Featured Product

    IAIS and SIF Publish Paper on Implementation of TCFD Recommendations

    February 27, 2020

    IAIS and Sustainable Insurance Forum (SIF) published an issues paper on implementation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Recognizing the diversity of supervisory frameworks across jurisdictions, the paper identifies a number of areas in which supervisors can encourage strengthened disclosures through the application of existing supervisory tools. To support supervisory efforts to assess the impact of climate-related risks to the insurance sector and help resolve challenges, including around public disclosures, IAIS and SIF will further work on climate-related risks in the insurance sector during 2020; the work will be focused on topics such as enterprise risk management, corporate governance, investment, and disclosures. Additionally, IAIS published a Peer Review Process (PRP) Questionnaire related to the Insurance Core Principle (ICP) 19 on conduct of business.

    In June 2018, IAIS and SIF released a joint issues paper on climate change risks to the insurance sector. As a follow-up to the 2018 issues paper and recognizing the important role of the TCFD Recommendations in establishing a framework for climate-related disclosures for the insurance sector, IAIS and SIF agreed to develop this second issues paper. This paper provides an overview of practices that supervisors have considered in the development of climate-related disclosure requirements within their markets. Considering the diversity of supervisory frameworks across jurisdictions, this paper focuses on practices that can be implemented with limited direct regulatory intervention. The paper draws on the results of a SIF survey on implementation of the TCFD recommendations and supplemental guidance, which was conducted during the first half of 2019. Case studies submitted by SIF members support the formulation of options for supervisors that are included in Annex 1.

    Going forward, supervisors may seek to consider a range of broader issues stemming from increased climate risk as they may be relevant for supervisory objectives, including the following issues:

    • The potential for increasing climate risk to affect insurance pricing for vulnerable consumers—Supervisors could consider how to use TCFD-aligned disclosures as a springboard to explore how insurance sector climate risk intelligence can be used to strengthen government and consumer awareness, incentivize mitigation actions, and ultimately reduce exposures.
    • Implications of climate risks for long-term business model resilience—Strengthening climate risk transparency, including forward-looking scenario analysis, could illuminate the ways in which climate risks may impact insurance business model viability over the long-term.
    • Interactions between micro- and macro-prudential objectives—In the case of integrated supervisory authorities, strengthening climate risk transparency may have implications for a range of institutional objectives. Integrated frameworks, linking firm-level disclosures to system-level assessments, could help strengthen understanding of the impact of climate risks on individual firms as well as the impact of the sector as a whole on climate risk resilience within the financial system and broader economy.

    The IAIS and SIF recognize the value of developing further material to support supervisors in their efforts to assess climate risks, including in relation to the ICPs. The second issues paper is a step toward this objective and is intended to lay the groundwork for development of future work, such as an IAIS Application Paper.

     

    Keywords: International, Insurance, TCFD, Sustainable Finance, ESG, Sustainable Insurance Forum, Climate Change Risk, Disclosures, IAIS

    Featured Experts
    Related Articles
    News

    APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness

    APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).

    December 02, 2021 WebPage Regulatory News
    News

    EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance

    The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).

    December 01, 2021 WebPage Regulatory News
    News

    FSB Sets Out Good Practices for Crisis Management Groups

    The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.

    November 30, 2021 WebPage Regulatory News
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Updates Timeline for Implementation of Certain Basel Rules

    Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.

    November 29, 2021 WebPage Regulatory News
    News

    EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR

    EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.

    November 29, 2021 WebPage Regulatory News
    News

    FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR

    The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Capital Adequacy Standards for Banks

    The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.

    November 29, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.

    November 29, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7751