Considering the impact of COVID-19 outbreak, IAIS announced initial adjustments to its work program to provide operational relief to its member supervisors, insurers, and other stakeholders. One of these adjustment includes reviewing the 2020 timelines for implementation of the holistic framework for the mitigation of systemic risk in the global insurance sector, in consultation with FSB.
During a meeting, the Executive Committee of IAIS also agreed on the following:
- IAIS will utilize the framework it has developed in recent years for forward-looking risk assessment to undertake a targeted assessment of the impact of COVID-19 on the global insurance sector
- IAIS will review and adjust the timelines for the data collection for the Insurance Capital Standard (ICS) confidential reporting in 2020 as well as the Aggregation Method data collection being supported by IAIS. As a first step, the submission deadline will be extended to October 31, to provide operational relief to participating insurers. In the current circumstances, submissions should be on a best-effort basis. The workplan for development of high-level principles to inform the development of criteria by which to assess whether the Aggregation Method provides comparable outcomes to the ICS will be adjusted to re-schedule the consultation previously planned for July 2020
- IAIS will postpone development of supporting material (Issues Papers and Application Papers providing guidance on supervisory practices), with public consultations generally deferred by at least six months.
A number of IAIS members also adopted measures to support fair treatment of customers, including clear disclosure and efficient claims processing in light of COVID-19 developments. IAIS members are pursuing a range of regulatory and supervisory measures to provide operational relief to insurers in the wake of the COVID-19 outbreak and to provide appropriate flexibility to help insurers maintain their safety and soundness and deliver the essential services they provide to policyholders and the economy. IAIS will continue to assess and address the implications of COVID-19 on the global insurance sector and is actively coordinating with FSB and other standard-setting bodies on cross-cutting financial system issues. Further steps will be taken, as necessary, to coordinate the actions taken by IAIS members to mitigate the impact of COVID-19 on insurers, safeguard policyholders, and contribute to the maintenance of financial stability.
Keywords: International, Insurance, COVID-19, ICS, Aggregation Method, Systemic Risk, Data Collection, Timeline, Operational Risk, Operational Resilience, Fair Treatment, Disclosure, FSB, IAIS
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.
Previous ArticleOJK Amends Regulation on Corporate Governance
HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
PRA provided further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges arising from COVID-19 outbreak.
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.