International Association of Insurance Supervisors
Individual insurer monitoring assessment methodology - IAIS publish Consultation Paper - 9 December 2022
The International Association of Insurance Supervisors (IAIS) has published a Consultation Paper on its review of its individual insurer monitoring (IIM) assessment methodology, which is used to calculate individual insurers’ systemic risk scores.
The deadline for responses is 6 February 2023 and a public background session on the Consultation Paper will be held on the 10 January 2023. The IAIS will consider feedback before finalising the IIM assessment methodology.
Please also see the item below on the publication by the Financial Stability Board of a statement on monitoring systemic risk in the insurance sector.
IAIS: Consultation on the review of the individual insurer monitoring (IIM) assessment methodology
Webpage
Press release
Financial Stability Board
Framework for the assessment and mitigation of systemic risk and discontinuance of G-SIIs - FSB publishes statement - 9 December 2022
The Financial Stability Board (FSB) has published a statement on monitoring systemic risk in the insurance sector, in which it endorses an improved framework for the assessment and mitigation of systemic risk and the discontinuation of the annual identification of global systemically important insurers (G-SIIs).
The FSB will continue to receive from the IAIS an annual update of the outcomes of its global monitoring exercise (GME), including the IAIS’ assessment of systemic risk in the sector, possible concentration of systemic risks at an individual insurer level and the supervisory response to identified risks.
From 2023 onwards, the FSB will publish in its FSB’s Annual Resolution Report a list of insurers that are subject to resolution planning and resolvability assessments.
Press release
Financial Conduct Authority
Cost of living - FCA publishes Dear CEO letter to life insurers - 14 December 2022
The FCA has published a Dear CEO letter to life insurers detailing its expectations in relation to the cost of living crisis. This follows Dear CEO letters sent to lenders and general insurers in June and September 2022 respectively. In summary, the FCA’s expectations of life insurers include:
- protection products: life insurers are expected to ensure that consumers are provided with appropriate product information during all stages of communication, and to make customers aware of the options available to them if they have difficulty paying premiums;
- pensions, long-term savings and retirement income: firms are expected to take reasonable steps to make customers aware of their options and the consequences of accessing and stopping or reducing contributions to pensions and long-term savings, as well as highlighting the potential risks associated with their chosen investment or drawdown strategies;
- consumer value: firms expect heightened demand for annuity products due to the significant increase in rates over this year and potentially for equity release/lifetime mortgage products among older customers. Firms are expected to ensure that these propositions offer fair value to consumers;
- customer support: firms should be supporting customers showing signs of financial difficulty or struggling with debt;
- scams: an increasing number of consumers are vulnerable to scams, so life insurers should ensure anti-scam communications are used to protect consumers where possible; and
- operational resilience: life insurers should consider what affect the rising cost of living will have on their operational resilience, including supporting their staff and effectively managing third-party providers to reduce the risk of operational disruption.
FCA Dear CEO letter: Our expectations of life insurers in relation to the cost of living
