Regulators in the Asia Pacific will ask more questions of financial firms, including insurers, in 2017 and demand more frequent, more detailed and more accurate data, according to the Deloitte Centre for Regulatory Strategy.
In its report, “Asia Pacific Regulatory Outlook for 2017”, the centre says that pressure will be placed on firms to submit data in various different ways, for it to be aggregated across the business and to be subjected to timely analysis and reporting (internally and to the regulator).
Failure to meet these requests will leave regulators questioning a firm’s ability to manage its risk and will likely lead to a more intrusive supervisory approach, the report says.
Big Data, advances in analytics and leaps in computational capacity have driven a growing expectation that firms should be able to understand, monitor and report on all aspects of their business and all critical risk types both quickly and correctly.
Greater regulatory demands will need to be met with greater capability and governance. Many firms face multiple legacy platforms leading to unwieldy, siloed and manual data process and systems.
Apart from increasingly intense and data driven supervision, the report also highlights other major regulatory themes dominating the outlook for Asia Pacific financial services firms during 2017. These are:
- Maintaining the resilience of financial institutions and the financial system, including “Basel IV”, stress testing and recovery and resolution planning.
- Ensuring firms have robust governance frameworks and are cultivating the right culture.
- Managing the impact of innovations in technology.
Progressing global capital standards for insurers
The report also notes that the IAIS is developing the first global capital standard for insurance companies (ICS).
The ICS will be the minimum capital standard for Internationally Active Insurance Groups (IAIGs), as well as for Global Systemically Important Insurers (G-SIIs). ICS Version 1.0 is due to be finalised by mid-2017 and Version 2.0 by the end of 2019.