Featured Product

    IAIS Consults on Application Paper on Resolution Powers and Planning

    November 09, 2020

    IAIS is consulting on an application paper that is intended to provide guidance on supervisory practices for resolution powers and planning. The paper provides guidance on the application of Insurance Core Principles on exit from the market and resolution (ICP 12) and on supervisory cooperation and coordination (ICP 25), including the ComFrame standards integrated therein. The paper discusses the objectives and concepts of resolution as well as concepts around point of non-viability and entry into resolution. The paper also provides further guidance and practical examples around resolution powers, resolution planning, and resolvability assessments. The consultation period on the application paper ends on February 05, 2021.

    This paper and most of its concepts are relevant to the business of primary insurers and reinsurers as well as to the insurance legal entities and insurance groups. This application paper aims to:

    • Provide guidance to supervisors and/or resolution authorities on the practical application of resolution powers as well as on cooperation and coordination between authorities when planning for, and exercising, such powers
    • Provide guidance on resolution planning, which may be beneficial to supervisors, resolution authorities, and/or insurers, depending on the circumstances within a jurisdiction
    • Provide examples to illustrate the application of standards and guidance relevant to resolution
    • Address issues that were identified during the development of supervisory material in ICP 12 and ComFrame, including the feedback received from IAIS members and stakeholders

    The issues that were identified during the development of supervisory material in ICP 12 and ComFrame, include guidance and clarifications on expectations for resolution planning; explanations and examples of the application of resolution powers; practical application of proportionality in the case of resolution; and role of policyholder protection schemes in resolution. This paper discusses the role that a policyholder protection scheme, if established within a jurisdiction, may have in relation to certain resolution powers as well as in relation to the resolution authority. It does not, however, aim to provide a comprehensive overview on the role of policyholder protection schemes in resolution. The paper is part of a wider project, whereby IAIS is developing supporting material on recovery and resolution. An earlier paper on recovery planning was published in 2019.

    The paper also provides guidance to certain additional elements that are set out in ComFrame, which focuses on internationally active insurance groups, or IAIGs, only, in particular the requirements related to resolution planning, resolvability assessments, and crisis management groups (CMGs). The guidance in this areas is thus intended to be particularly useful for supervisors and/or resolution authorities of IAIGs where prior planning for resolution and cross-jurisdictional coordination may be beneficial. While certainly important for resolution, issues related to valuation and funding in resolution have not been discussed in detail. However, these issues are closely linked to ICPs 14 and 17 (Valuation and Capital Requirements), which are scheduled to be revised in the coming years (during the monitoring period of the Insurance Capital Standard Version 2.0).

     

    Comment Due Date: February 05, 2021

    Keywords: International, Insurance, Reinsurance, Resolution Planning, Resolution Framework, ICP, ComFrame, Proportionality, Resolvability Assessment, IAIS

    Related Articles
    News

    EC Publishes Regulations Supplementing Investment Firms Directive

    The European Commission (EC) published three Delegated Regulations (2021/2153, 2021/2154, and 2021/2155) to supplement the Investment Firms Directive (IFD or Directive 2019/2034).

    December 07, 2021 WebPage Regulatory News
    News

    FSB Report Examines Trends in Non-Bank Intermediation in Americas

    The Financial Stability Board (FSB) published a report that presents results of the sixth non-bank financial intermediation monitoring exercise in the Americas.

    December 06, 2021 WebPage Regulatory News
    News

    BIS Discusses Regulatory Approach for Non-Bank Intermediation

    The Bank for International Settlements (BIS) published the December issue of the Quarterly Review, which analyzes the non-bank financial intermediation mechanisms that could undermine financial stability.

    December 06, 2021 WebPage Regulatory News
    News

    BoE Calls for Vendor Input for Data Collection Transformation Program

    The Bank of England (BoE) opened the Alternative Liquidity Facility, or ALF, for deposits from the participating UK-based Islamic banks for the first time.

    December 03, 2021 WebPage Regulatory News
    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

    EBA Proposes Standards on Interest Rate Risk in the Banking Book

    The European Banking Authority (EBA) launched three consultations on technical aspects of the revised framework capturing interest rate risks for banking book (IRRBB) positions, with the comment period ending on April 04, 2022.

    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

    EBA Sets Out List of Banks for Mandatory Basel III Monitoring Exercise

    The European Banking Authority (EBA) published the sample of banks for the mandatory Basel III monitoring exercise, which will refer to the December 2021 data.

    December 01, 2021 WebPage Regulatory News
    News

    FED Revises Complex Institution Liquidity Monitoring Report for Banks

    The Board of Governors of the Federal Reserve System (FED) is adopting a proposal to revise and extend for three years the Complex Institution Liquidity Monitoring Report (FR 2052a) for banks.

    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
    RESULTS 1 - 10 OF 7758