Insurance Europe calls on IAIS to remove new standards from paper

Insurance Europe has asked the International Association of Insurance Supervisors (IAIS) to remove any new standards for insurers from its draft application paper on group corporate governance. While Insurance Europe welcomed the IAIS’s efforts on supervisory convergence, it stressed that the intended nature of IAIS application papers was not to set any new standards for insurers. In its response to the consultation on the paper, Insurance Europe said: “Several of the good practices and recommendations in the draft application paper include direct or implicit regulatory requirements for insurers/groups. It is Insurance Europe’s understanding that it was the intention of the IAIS not to set any new standards (as set out in paragraph one of the draft application paper – ‘it does not set new standards’), yet throughout the text the IAIS sets out overly granular recommendations, which are in fact new standards.” Insurance Europe added that it “encourages the IAIS to clearly separate recommendations for supervisors from obligations for insurers/groups (which already exist) and to remove new standards for insurers/groups”. It continued: “The latter should be subject of the regulatory framework for insurers/groups, ie ICPs and ComFrame, and should only be referenced in the application paper where necessary.” Insurance Europe said it supports the objective of enhancing the development of a common understanding among supervisors in relation to governance frameworks of insurance groups. It also said it supported the IAIS’s recognition of the effective operation of a range of centralised and de-centralised governance frameworks within industry. But in terms of the draft application paper, Insurance Europe warned that at times it was “too granular and should maintain sufficient flexibility for supervisors to apply regulatory requirements proportionally”. Insurance Europe stressed that under the proposed framework, supervisors should be able to maintain sufficient levels of flexibility to apply the principle of proportionality in their supervision of insurance groups, adding that some of the proposed good practices and examples provided seem to suggest a stringent one-size-fits-all approach. “Overreliance on certain limited characteristics for the assessments of appropriateness of the governance structure chosen by the group may be inappropriate,” it added. In one particular section, Insurance Europe had some pertinent advice for the IAIS. The draft paper said it aims to provide supervisory responses and best supervisory practices for the five main areas where insurance groups face challenges: setting objectives and strategies; allocation of oversight and management responsibilities; policies and processes; risk management and compliance; and control functions. However, the insurance association responded: “Given the aim of this draft application paper is to provide good supervisory practices and examples, Insurance Europe would suggest that it would be more appropriate for this paragraph to set out the areas of challenge for supervisors rather than insurers/groups.”

Insurance Europe calls on IAIS to remove new standards from paper

Want to read this article?

Read Next

AXA P&C increases premiums by 7% as rates rise at AXA XL

Hong Kong and Shanghai to cooperate on captives and ILS

Swiss broker Kessler names head of special risks

US insurers expected to increase casualty pricing as social inflation rises

Consultancy S-RM expands cybersecurity practice to APAC

AXA P&C increases premiums by 7% as rates rise at AXA XL

Hong Kong and Shanghai to cooperate on captives and ILS

Swiss broker Kessler names head of special risks

US insurers expected to increase casualty pricing as social inflation rises

Consultancy S-RM expands cybersecurity practice to APAC

Want to read this article?

Read Next

AXA P&C increases premiums by 7% as rates rise at AXA XL

Hong Kong and Shanghai to cooperate on captives and ILS

Swiss broker Kessler names head of special risks

US insurers expected to increase casualty pricing as social inflation rises

Consultancy S-RM expands cybersecurity practice to APAC

Related Articles