IAIS issued two major public consultation documents collectively addressing Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) in its entirety, with one focused on the qualitative components and the second on the risk-based global Insurance Capital Standard (ICS) Version 2.0. Along with the ICS Version 2.0 consultation document, IAIS has released the 2018 Field Testing package. Comment period ends on October 30, 2018. IAIS plans adoption of all revised ICPs and ComFrame (including ICS Version 2.0) at its Annual General Meeting in November 2019. IAIS, jointly with the Sustainable Insurance Forum (SIF), also published the final issues paper on climate change risks to the insurance sector.
ComFrame. On the qualitative side, the overall ComFrame public consultation document includes introductory material and ComFrame material integrated into ICP 5 (Suitability of Persons); ICP 7 (Corporate Governance); ICP 8 (Risk Management and Internal Controls); ICP 9 (Supervisory Review and Reporting); ICP 10 (Preventive Measures, Corrective Measures and Sanctions); ICP 12 (Exit from the Market and Resolution); ICP 15 (Investments); ICP 16 (Enterprise Risk Management for Solvency Purposes); ICP 23 (Group-wide Supervision); and ICP 25 (Supervisory Cooperation and Coordination). Only ComFrame material is subject to public consultation. The ICP text is not subject to public consultation and has been published only for information purposes as context for ComFrame material. IAIS also published timeline of ComFrame Development and ICPs Revision, comparison table for draft overall ComFrame, and Frequently Asked Questions on ComFrame.
ICS Version 2.0. This version of ICS is scheduled to be completed in late 2019 and post that the monitoring period is expected to start on January 01, 2020. The consultation document aims to solicit stakeholder feedback on the ICS ahead of the completion of ICS Version 2.0, in particular:
- Different components of the reference ICS, for which the IAIS has narrowed the options
- Additional reporting at the option of the group wide supervisor, which includes GAAP with adjustments and other methods of calculating the ICS capital requirement, notably internal models
- Expectations for IAIS and supervisors during the five-year monitoring period of mandatory confidential reporting ahead of the implementation of the ICS as the Prescribed Capital Requirement
- Incremental costs and benefits for Internationally Active Insurance Groups or IAIGs
IAIS also published the 2018 Field Testing Package, including technical specifications, field testing questionnaire, IAIS Base Yield Curve Methodology for ICS Version 2.0, and field testing template and yield curves.
Revision of ICPs 8, 15, and 16. IAIS published responses to the key substantive comments received to its consultation on ICPs 8, 15, and 16. IAIS had received numerous comments during the November 2017 to January 2018 public consultation from both members and stakeholders, which provided valuable input for further improvements and revisions. The overall ComFrame, which was published for consultation on 31 July 2018, includes ComFrame material integrated into ICPs 8, 15 and 16, which reflect comments received during the public consultation. Draft revised ICPs 8, 15 and 16 (published for consultation together with ComFrame material integrated into those ICPs in November 2017) will be published for information purposes only, following their endorsement by the Executive Committee in November 2018. Both revised ICPs and Overall ComFrame are expected to be adopted in 2019.
Issues Paper on Climate Change Risks. The paper sets out a three-pillar framework of observed approaches to address climate change risks, which supervisors may consider in designing and implementing their own efforts. Drawing on an internal survey, the paper sets out ten state-of-the-art approaches undertaken by SIF members—including Australia, Brazil, France, Italy, the Netherlands, Sweden, the United Kingdom, and the US states of California and Washington in the United States. A public consultation on the paper was undertaken during April. Several hundred comments were received from 20 registered respondents—including market associations, insurers and reinsurers, supervisors, and nongovernmental organizations. Over coming months, the paper will be translated into all UN languages (Arabic, Chinese, English, French, Russian, Spanish) plus Portuguese. The SIF will also develop templates for supervisors to facilitate outreach efforts with firms, and encourage adoption of best practices.
Comment Due Date: October 30, 2018
Keywords: International, Insurance, ComFrame, ICS, ICP, Climate Change Risks, Field Testing, IAIS
Previous ArticleOCC to Accept National Bank Charter Applications from Fintech Firms
Next ArticleFED Revises and Extends Form FR Y-9C for Three Years
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.