Time for action over excess covers–comment

ECIROA is only a small organisation but it had Observer status at the IAIS. Unfortunately, this is to be abolished by IAIS, for all Observers, consisting of associations, insurers, brokers and others.

The move, which was voted on by IAIS members at the AGM in October last year in a closed session, amended IAIS bylaws to end Observer membership status, which included participation in some IAIS meetings, in favour of creating new stakeholder consultation procedures.

The IAIS has done its best to paint this as an improvement in transparency and a better deal for stakeholders, pointing out that in place of Observer status, the IAIS would commit to “publicly consult on the development of all supervisory and supporting material, with all interested stakeholders able to receive information on the IAIS’ development of supervisory and supporting material at multiple stages.” It would also hold public discussion sessions, and hold public sessions with its Executive Committee at least once a year, and provide ‘timely public information’ on IAIS activities.

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But this hasn’t gone down well with insurance and other associations who had Observer status. For example, the Global Federation of Insurance Associations (GFIA) said that while it welcomes the IAIS efforts to identify channels of communication with stakeholders, “given the decision to close all meetings by default and to exclude stakeholders from the IAIS annual conference, GFIA members remain concerned about the lack of face-to-face communication between the IAIS and stakeholders. We believe this will harm stakeholders’ understanding of the IAIS’ ongoing work and will also negatively impact the ability of stakeholders to provide valuable input as measures affecting the industry are developed.”

And the US NAIC said it was “extremely disappointed”. Adam Hamm, NAIC President and North Dakota Insurance Commissioner, said: “Observers run the range of consumer advocates, insurance experts, and industry representatives – all of whom have critical input to share on the real-world consequences of decisions made by regulators. Shutting them out of the official process in favour of ‘invite only’ participation deprives IAIS members and stakeholders alike and could diminish the credibility of decisions made at the IAIS.”

It is to be hoped that none of these changes will affect ECIROA’s lobbying process over excess covers. But it does underline the need for the whole insurance and risk management sector to get behind the campaign and present a unified front to the IAIS to ensure that the message is received and understood and ultimately acted upon.