International Association of Insurance Supervisors
Insurance Core Principles 9 and 10 - IAIS publishes Peer Review of Supervisory Review and Measures - 14 March 2023
The International Association of Insurance Supervisors (IAIS) has published a report setting out the aggregate assessment results and observations from its peer review process. The review focused on the thematic topic of supervisory review and preventive measures, relating to the standards in Insurance Core Principles (ICPs) 9 (supervisory review and reporting) and 10 (preventative and corrective measures, and sanctions).
The report notes that, overall, the observance rate for ICPs 9 and 10 has increased since the last assessment of the ICPs in 2014. The majority of participants in this peer review process scored either ‘observed’ or ‘largely observed’ and the remaining jurisdictions achieved ‘partly observed’. In terms of the level of observance per standard, an overwhelming majority of members observed standards 9.5, 9.7, 10.3 and 10.4. The observance levels for standards 9.1, 9.3, 9.4, 9.6 and 10.6 were, however, lower, suggesting these are potential areas in which members need to improve.
A confidential Annex to the report (Annex 4), which is only available on the IAIS' members-only extranet, shows the high-level results of each jurisdiction.
Peer review of supervisory review and measures relative to the standards set out in Insurance Core Principles 9 and 10
Questionnaire
Supervision of climate-related risks - IAIS publishes Consultation Paper - 16 March 2023
The IAIS has published its first Consultation Paper on proposed climate risk supervisory guidance.
In 2022, the IAIS performed a gap analysis of existing IAIS supervisory material to assess how climate risk is captured and to identify possible further work on standard setting. This followed the publication, in May 2021, of an initial application paper on the supervision of climate-related risks.
Following the gap analysis, the IAIS has decided to consult on changes to guidance on several Insurance Core Principles (ICP) and to develop supporting material in several consultations over the next 18 months. In this, its first consultation, the IAIS:
- provides an update on the overall work programme of the IAIS in promoting a globally consistent supervisory response to climate change within the insurance sector;
- outlines proposed changes to the ICP Introduction, which positions climate risk within the global framework for insurance supervision;
- discusses whether it is necessary to make changes to the existing supporting material related to corporate governance (ICP 7), risk management and internal controls (ICP 8); and
- seeks stakeholder feedback on the overall climate-related work as it relates to supervisory guidance.
The consultation closes on 16 May 2023. The IAIS intends to hold a public background session on 29 March 2023 to discuss the paper.
Consultation on Climate risk supervisory guidance - part one
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European Insurance and Occupational Pensions Authority
Differential pricing practices - EIOPA publishes Supervisory Statement and Feedback Statement - 16 March 2023
The European Insurance and Occupational Pensions Authority (EIOPA) has published a Supervisory Statement and accompanying Feedback Statement on differential pricing practices in non-life insurance lines of business, following its Consultation Paper published in July 2022.
For the purposes of the supervisory statement, EIOPA defines ‘differential pricing practices’ as those pricing techniques where consumers with a similar risk and cost of service are charged different premiums for the same insurance product (with the same terms and conditions), for reasons other than risk or cost of service.
Mirroring the draft Supervisory Statement, the finalised expectations set out by EIOPA include:
- examples of differential pricing practices that are considered to lead to unfair treatment of consumers (including increasing the price of the insurance product at the renewal stage based on the customer’s low propensity to shop around, which is known as ‘price walking’);
- expectations regarding how insurance manufacturers’ governance measures should ensure that these practices do not unfairly affect consumers; and
- expectations regarding how national competent authorities should supervise the regulatory expectation that differential pricing practices do not lead to unfair treatment of consumers.
EIOPA Supervisory Statement on differential pricing practices in non-life insurance lines of business
EIOPA Feedback Statement: Consultation on the Supervisory Statement on differential pricing practices in non-life insurance lines of business
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