Buyer associations step up campaign to bring about global programme rule changes

Meanwhile, Ferma is forging a partnership with Axco Insurance Information Services (Axco) to bring its global programme compliance database, specifically aimed at insurance buyers, to risk managers across Europe. Last week International Programme News' sister publication Commercial Risk Europe learned that Eciroa will deliver two papers to the International Association of Insurance Supervisors (IAIS) this month. They will propose formal guidelines for the treatment of global programmes by supervisors. Günter Dröse, Chairman of Eciroa, explained that this move will be a big step in achieving better global supervision for captives and the placement of multinational programmes. The first paper is a 'formal request' that explains to the IAIS why a paper on this subject is needed.hideThe second paper explains via gap analysis why the problems experienced by the insurance market over global programmes are not covered by existing IAIS Insurance Core Principles (ICPs) and are therefore not addressed by the association. Following these papers it is hoped that the IAIS will agree that improved supervision, that better suits the globalised economy, is needed for multinational programmes. If all goes to plan, the IAIS will then produce an ICP that will advise national supervisors how to better treat cross-border coverages. IAIS ICPs only provide guidance and the association has no formal powers to force national supervisors to implement its decisions or guidance. But Mr Dröse believes that if his campaign is successful it could be the building block for better consistency, clarity and compliance of global programmes. Eciroa said its campaign has almost 'full support' of the leading international insurance companies. "All the leading insurers, except one, have given me their full backing in this effort and we also have the support of some local supervisors. The one insurer that did not fully support the effort is being kept informed and if they want to contribute then I would be more than pleased," Mr Dröse said. One area that Mr Dröse would like to see addressed is the acceptance of excess cover (DIC/ DIL) in all countries. Risk managers and insurance buyers have long complained about the difficulties they face in placing compliant multinational programmes. They are concerned that the rules laid down by national insurance regulators on issues such as non-admitted insurance fail to take into account the needs of multinational companies. In response, Ferma announced at its forum in Venice early this month that it is formulating a strategy to tackle global programmes. It hopes to deliver regulatory rule changes and simplify insurance placement for members. This campaign will in part be waged through its representation on a key European Insurance and Occupational Pensions Authority (EIOPA) stakeholder group that Ferma believes will facilitate discussion with IAIS on this thorny topic. Julia Graham, who passed on the presidency of Ferma to Jo Willaert at the end of the forum, said that there has been contact with regulators on this issue and more discussion will follow. In the meantime, Ferma is stepping up efforts to decide exactly what issues need to be addressed and key priorities. "There has been some direct contact with regulators. But I would say that before you go to the regulator's table you need to be very sure what you want to ask them," said Ms Graham. "We have to approach the people who make the decisions but first we need to understand the key issues and have a set of questions to pose to them before we do that." Ferma has been consulting with member associations and other regional bodies to work out the issues that need to be tackled and the best way forward. "We wish to continue supporting collaboration with members and our colleagues from other risk management associations such as RIMS and Parima on research to deliver improvements, if not a total solution, to the way risk managers can ensure, as best as possible, the compliance of their international programmes. This is a particular challenge we will take very seriously on the Ferma board," said Ms Graham. Ferma's vice-president Dirk Wegener explained that the federation is still forming its overall campaign strategy. But good progress is being made, he said. "It is too early to tell how this will work in practice but we are discussing it with various stakeholders and are on track," he explained. Ms Graham said Ferma has consolidated the views of its members and is forming a list of questions with which to approach the regulators and other stakeholders on the issue of multinational programme compliance. Ferma believes that its representation by former president Marie-Gemma Dequae on EIOPA's Insurance and Reinsurance Stakeholder Group that discusses regulatory issues will help it to raise concerns. Through this channel Ferma will be able to make representations to EIOPA and then up to the IAIS. The architect of Solvency II, Karel Van Hulle, now chairs EIOPA's Insurance and Reinsurance Stakeholder Group. Ms Dequae said he has a solid understanding of the needs of insurance buyers as well as the insurance community, and she thinks this will help Ferma's cause. "It is important to see that EIOPA is in contact with IAIS. Through that international link we will be able to work on international insurance programmes and work through that European platform into the international sphere," said Ms Dequae. "The regulators are willing to listen and capture what is happening in the market and looking to produce good regulation," she concluded. In the meantime, Ferma is taking proactive steps to help members deal with the current global programmes rules in place. It is therefore teaming with Axco to provide its buyer-focused global programme database, Insight Risk Manager, to members. The Insight Risk Manager tool, developed with Airmic, was launched in June 2014. It is designed to help risk managers obtain information on regulatory insurance requirements, policy conditions and premium payment terms in different jurisdictions around the world. Insight Risk Manager now covers 100 territories, up from 30 at launch. Ms Graham explained that Ferma is 'forging a partnership' with Axco to make the database available to all Ferma member associations. She explained that the system will not be foisted upon any national associations around Europe. They will be left to decide whether to deliver Insight Risk Manager to their members, she stressed. However, Ferma believes its use would bring huge benefits to risk managers across Europe. "We will forge a relationship with Axco. The relationship is non-exclusive because we have members that use other systems, many of which connect to Axco. We will be facilitators between Axco and our member associations. But it will be for each association to decide whether or not it wishes to progress a relationship with Axco," said Ms Graham. She said that Ferma will make sure that the countries on the database reflect the needs of its membership. "We will also make sure we have the opportunity to share the availability of the system to all of our association members-big and small-as a useful tool when managing international programmes," added Ms Graham.

Buyer associations step up campaign to bring about global programme rule changes

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