Insurance supervisors call for enhanced coordination during tough financial times

Insurance supervisors worldwide have committed themselves to enhancing coordination efforts in an move to contain any contagious effects of global market volatility, the International Association of Insurance Supervisors (IAIS) has announced.
The IAIS concluded its annual conference and general meeting in Budapest, Hungary, where it discussed several regulatory issues against the backdrop of market turmoil. “The IAIS has shown its ability to react quickly to the crisis by stepping up coordination efforts,” said Peter Braumuller, executive committee chair of the IAIS.
In particular, the association said: “Issues to be further assessed include contagion effects in crisis situations and macro-prudential issues such as transparency and risk management.”
Also entering into the conference dialogue was the supervision of global reinsurance companies. A common theme that surfaced in the discussions was the need for an appropriate framework on the mutual recognition of reinsurance supervision.
“In this regard, the IAIS Guidance Paper on the Mutual Recognition of Reinsurance Supervision, as adopted at the Annual Conference in Budapest, was highly appreciated,” the IAIS announced in a press release. “Moving forward, both industry representatives and IAIS members encouraged the IAIS to continue its efforts to identify and to facilitate steps towards concrete recognition agreements.
“Reinsurance is a critical risk mitigation tool for insurers and therefore supervisory approaches should be improved in order to facilitate global diversification of reinsurance risk.”