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Transcript of IAIS Standards Setting Activities and the Insurance Core Principles Washington – 4 May 2004 Luc...
IAIS Standards Setting Activities and the IAIS Standards Setting Activities and the Insurance Core PrinciplesInsurance Core Principles
Washington – 4 May 2004Luc Cardinal – Member of Secretariat
International Association of Insurance Supervisors (IAIS)Website: www.iaisweb.org
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 2Luc Cardinal
1.1. IAIS PrinciplesIAIS Principles
• Insurance Core Principles• Supervision of international insurers• Conduct of insurance business• Insurance activities on the internet• Capital adequacy and solvency• Supervision of reinsurers
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 3Luc Cardinal
2.2. IAIS StandardsIAIS Standards
• Licensing• On-site supervision• Derivatives• Asset management• Group coordination• Exchange of information• Evaluation of the reinsurance cover• Supervision of reinsurers
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 4Luc Cardinal
3.3. IAIS Guidance papersIAIS Guidance papers
• Supervision in emerging market economies• Model memorandum of understanding for
exchange of information• Fit and proper principles and application• Public disclosure by insurers• Anti-money laundering and combating the
financing of terrorism• Solvency control levels• Use of actuaries• Stress testing• Investment risk management
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 5Luc Cardinal
4.4. IAIS StructureIAIS Structure
Secretariat
Dialogue Group
Secretariat Budget Committee
Education Subcommittee
Emerging Markets Committee Working Group on Observership & Membership Issues
Insurance Laws, Regulations, Practices& Standards Subcommittee
Task Force on Assessment& Implementation of ICPs
Investments Subcommittee Financial Conglomerates Subcommittee
Subcommittee on Enhanced Disclosure Insurance Fraud Subcommittee
Solvency & Actuarial Issues Subcommittee Working Group on Electronic Commerce/Internet
Task Force on Enhancing Transparency& Disclosure in the Reinsurance Sector
Accounting Subcommittee
Reinsurance and Other Forms of Risk Transfer Subcommittee
Technical Committee
Executive Committee
General Meeting
Task Force on the Core Curriculum Project
Task Force on the Revision of the By-laws
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 6Luc Cardinal
5.5. IAIS Standard SettingIAIS Standard Setting
Core Principles
Core Principles
Principles
Supervisory Standards
Guidance & Issues Papers
Principles
Supervisory Standards
Guidance & Issues Papers
• Pyramidal approach
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 7Luc Cardinal
6.6. IAIS Document AdoptionIAIS Document Adoption
Working partyWorking party
Technical and Executive CommitteesTechnical and Executive Committees
General MeetingGeneral Meeting
Drafting and consultationDrafting and consultation
Review and approvalReview and approval
Final adoption and publication (hopefully!)
Final adoption and publication (hopefully!)
WP Members WP Members Some Observers Some Observers
IAIS Members & Observers IAIS Members & Observers
√√
IAIS Members & Observers IAIS Members & Observers
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 8Luc Cardinal
• The first ICPs adopted in October 2000, based on 1997 Insurance supervisory principles
• FSAP (the Financial Sector Assessment Program) started in 1999
• Joint Forum comparison of the core principles in banking, insurance and securities sectors in 2001
• FSAP experiences
• Revision of ICPs
7.7. History of Insurance Core PrinciplesHistory of Insurance Core Principles
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 9Luc Cardinal
• Code of Good Practices on Transparency in Monetary and Financial Policies (by IMF)
• Code of Good Practices in Fiscal Transparency (by IMF)
• Special Data Dissemination Standard / General Data Dissemination System (by IMF)
• Principles of Corporate Governance (by OECD)
• International Accounting Standards (by IASB)
8.8. 12 key standards for sound financial systems 12 key standards for sound financial systems (by Financial Stability Forum) (by Financial Stability Forum)
• International Standards on Auditing (by IFAC)
• Core Principles for Systemically Important Payment Systems (by CPSS)
• Recommendations for Securities Settlement Systems (by CPSS/IOSCO)
• The Forty Recommendations of the FATF/ 8 Special recommendations Against Terrorist Financing (by FATF)
• Core Principles for Effective Banking Supervision (by BCBS)
• Objectives and Principles of Securities Regulation (by IOSCO)
• Insurance Core Principles (by IAIS)
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 10Luc Cardinal
Title Insurance Core Principle
1. Introduction Background, scope, implementation and assessment
2. Conditions ICP 1: Conditions for effective insurance supervision
3. The supervisory system
ICP 2: Supervisory objectives
ICP 3: Supervisory authority
ICP 4: Supervisory process
ICP 5: Supervisory cooperation and information sharing
4. The supervised entity ICP 6: Licensing
ICP 7: Suitability of persons
ICP 8: Changes in control and portfolio transfers
ICP 9: Corporate Governance
ICP 10: Internal control
9.9. Insurance Core Principles (ICP)Insurance Core Principles (ICP)
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 11Luc Cardinal
Title Insurance Core Principle
5. Ongoing supervision ICP 11: Market analysis
ICP 12: Reporting to supervisors and off-site monitoring
ICP 13: On-site inspection
ICP 14: Preventive and corrective measures
ICP 15: Enforcement or sanctions
ICP 16: Winding-up or exit from the market
ICP 17: Group-wide supervision
6. Prudential requirements
ICP 18: Risk assessment and management
ICP 19: Insurance activity
ICP 20: Liabilities
ICP 21: Investments
ICP 22: Derivatives and similar commitments
ICP 23: Capital adequacy and solvency
10.10. Insurance Core Principles (ICP)Insurance Core Principles (ICP)
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 12Luc Cardinal
Title Insurance Core Principle
7. Markets and consumers
ICP 24: Intermediaries
ICP 25: Consumer protection
ICP 26: Information, disclosure & transparency towards the market
ICP 27: Fraud
8. AML/CFT ICP 28: Anti-money laundering, combating the financing of terrorism
Annex 1 References
Annex 2 Assessment methodology
11.11. Insurance Core Principles (ICP)Insurance Core Principles (ICP)
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 13Luc Cardinal
12.12. Implementation of IAIS standardsImplementation of IAIS standards
– Training and seminars
– Implementation tools
– Self assessment
– Provision of Technical Assistance
– Assisting FSAP
IAIS standards setting activities and the Insurance Core PrinciplesIAIS standards setting activities and the Insurance Core Principles 14Luc Cardinal
13.13.Cooperation with othersCooperation with others
• Regular discussion amongst supervisors• Joint Forum• Financial Stability Forum• International Accounting Standard Board• International Federation of Accountants• International Association of Actuaries• Financial Stability Institute• The World Bank• IMF