July 19, 2013 by Canadian Underwriter
The International Association of Insurance Supervisors published Thursday a new set of policy measures setting out how global insurers will be deemed “systemically important,” while an initial list of nine such companies has been released.
The policy measures address “recovery and resolution planning requirements, enhanced group-wide supervision and higher loss absorbency requirements,” according to the IAIS.
The measures are based upon the general framework established in 2011 for financial institutions generally by the Financial Stability Board (FSB), which represents major financial authorities worldwide, including the Bank of Canada.
They do include “adjustments,” the IAIS said, that “reflect the factors that make insurers different from other financial institutions.”
“Since the financial crisis, supervisors across the sector have worked diligently to address risks to the global financial system from systemically important financial institutions or SIFIs and macroprudential shocks,” Peter Braumüller, chair of the IAIS executive committee noted in a statement.
“The measures and framework put forth by the IAIS today complete a major piece of this reform in a manner specifically designed for the insurance sector.”
Based on the IAIS criteria, the FSB has identified nine global insurers deemed as systemically important, including:
That list will be updated annually each November, beginning in 2014. Measures for major reinsurers, and the decision on which will be deemed systemically important, will come in July 2014, based on the timeline provided by the FSB.