IAIS adopted a comprehensive set of reforms—Common Framework (ComFrame), Insurance Capital Standard (ICS) Version 2.0, and Holistic Framework for Systemic Risk—that will enable effective cross-border supervision of insurance groups and contribute to global financial stability. Additionally, IAIS published the resolution of comments received on the consultation on revisions to the IAIS Glossary, introduction to Insurance Core Principles (ICPs), ComFrame assessment methodology, and ICP 7 (Corporate Governance).
ComFrame—It establishes supervisory standards and guidance focusing on the effective group-wide supervision of Internationally Active Insurance Groups (IAIGs). ComFrame is a comprehensive and outcome-focused framework that provides supervisory minimum requirements tailored to international activity and size of IAIGs. The implementation of ComFrame should result in more efficient supervisory processes, for the benefit of both supervisors and IAIGs. ComFrame builds on the revised set of ICPs, which are applicable for the supervision of all insurers and have been adopted after extensive review. IAIS has published explanatory note and frequently asked questions (FAQs) on ComFrame, along with a document on ICPs and ComFrame.
ICS Version 2.0—IAIS published explanatory notes on ICS and comparability assessment, along with a Level 1 Document and a technical note on ICS Version 2.0 for the monitoring period. The newly agreed ICS Version 2.0 for the five-year monitoring period, starting in January 2020, was developed through a structured and evidence-based approach. During the monitoring period, ICS Version 2.0 will not trigger any supervisory action but will be used for confidential reporting and discussion in supervisory colleges to provide feedback to IAIS on the ICS design and performance. IAIS has agreed to a detailed plan for the operationalization of the monitoring period, including a workplan and timeline for the period 2020-2024 and a collective effort to make participation by IAIGs in the monitoring period as large as possible across different jurisdictions and business models. IAIS also agreed on a definition of comparable outcomes and an overarching approach for the development of criteria to assess whether the Aggregation Method provides comparable outcomes to ICS. The assessment will take place according to the published timeline. If the Aggregation Method is deemed to provide comparable outcomes to the ICS, it will be considered an outcome-equivalent approach for implementation of ICS as a prescribed capital requirement.
Holistic Framework for Systemic Risk—IAIS adopted the holistic framework for assessment and mitigation of systemic risk in the insurance sector, for implementation from the beginning of 2020. This framework recognizes that systemic risk can arise both from sector-wide trends with regard to specific activities and exposures as well as from a concentration of these activities and exposures in individual insurers. The framework consists of an enhanced set of supervisory policy measures and powers of intervention, an annual IAIS global monitoring exercise, and collective discussion on the outcomes and appropriate supervisory responses, along with a robust implementation assessment.
Keywords: International, Insurance, Systemic Risk, ComFrame, ICS Version 2.0, ICP, Holistic Framework, IAIG, IAIS
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BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).
US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.
PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.
EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).
FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.
IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.
FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).
EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.
ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.
IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.