At the conclusion of its 2015 Annual General Meeting held in Marrakech, Morocco, the International Association of Insurance Supervisors (IAIS) has adopted supervisory and supporting material that in-cludes Higher Loss Absorbency (HLA) requirement; revisions to the Insurance Core Principles (ICPs) and an application paper on the regulation and supervision of captive insurers. It also elected its exec-utive committee.
The development of the initial version of the HLA was concluded in October when it was endorsed by the IAIS Executive Committee and the Financial Stability Board. The HLA has now been adopted by the full IAIS membership and is expected to be endorsed by the G20.
For the revisions to the ICPs, these were adopted to ICP 4 (Licensing), ICP 5 (Suitability of Persons), ICP 7 (Corporate Governance), ICP 8 (Risk Management and Internal Controls), ICP 23 (Group-wide Super-vision) and ICP 25 (Supervisory Cooperation and Coordination).
These changes were initiated following conclusion of comprehensive Self-Assessments and Peer Re-views (SAPR) of the related ICPs. They also take into account recent developments in group supervi-sion, corporate governance and risk management as well as principles, standards and guidance issued by other standard setting bodies.
Several papers issued
The IAIS issued several papers. The Application paper on Regulation and Supervision of Captive Insur-ers provides guidance to insurance supervisors on the application of aspects of regulation and supervi-sion specifically relevant to captive insurers or reinsurers.
The paper on the Conduct of Business Risk and its Management aims to raise awareness of conduct of business risks and covers the conduct of business risk and its impact and the supervisor’s role. Another paper (Paper on Conduct of Business in Inclusive Insurance) was developed to take stock of the issues of fair treatment of the inclusive insurance customer or the customer of microinsurance products.
Lastly, the paper on Issues in Regulation and Supervision of Microtakaful, which was jointly developed with the Islamic Financial Services Board, provides regulatory and supervisory authorities and industry representatives with insights on the types of issues that arise from microtakaful practices.
New Chair
Dr Victoria Saporta, the Director of Financial Policy of the Prudential Regulation Authority at the Bank of England, was elected Chair. Dr Saporta succeeds Mr Felix Hufeld, who stepped down as Chair due to his appointment in March as President at the German Federal Financial Supervisory Authority (BaFin).