Current Challenges in Financial
Regulation and Supervision
– an IAIS Perspective
Peter Braumüller
Chairman of the IAIS Executive Committee
2010 Annual Conference of Macedonian Stock Exchange
30 April 2010
30 Apr 2010
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Content
• The International Association of Insurance
Supervisors (IAIS) - structure and
objectives
• Current global challenges
• IAIS Responses
• Outlook
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The IAIS
• Founded in 1994
• Represents insurance
regulators and supervisors
• World wide membership
• 202 Members (including 57 US Members)
• 135 Observers
• Secretariat based in Basel, Switzerland
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Key IAIS objectives
Global financial stability
Policyholder protection
Fair, safe and stable
insurance markets
Well-regulated and well-supervised
insurance markets
Improved supervision through
standard implementation
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Current Global Challenges
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Systemic Risk and Insurance
Macroprudential Supervision
Group-wide Supervision
Supervisory Cooperation
Standard Implementation
New Global Supervisory Architecture
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Systemic Risk and Insurance
Challenges:
• Defining systemic risk in the context of insurance
• Criteria (Size, Substitutability, Interconnectedness)
IAIS Response:
• IAIS Financial Stability Committee finalising a note for submission to the
FSB.
• Considerations
– Time horizon
– Insurance business model
– Instigation, transmission or amplification of risks
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Macroprudential Surveillence
Challenge:
Improving macroprudential supervision
IAIS Response:
• Exploring the setting-up of a macroprudential surveillance framework
• Development of macroprudential tools
• New Insurance Core Principle ICP 24
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Group-wide supervision
Challenge:
Strengthening group-wide supervision and minimising cross-sectoral
regulatory arbitrage
IAIS Response:
• Developing a Common Framework for the Supervision of Internationally
Active Insurance Groups (ComFrame)
• On-going standard setting work on insurance groups
• Guidance Paper on non-regulated entities
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Supervisory Cooperation
Challenge:
Strengthening international supervisory cooperation
IAIS Response:
• IAIS Multilateral Memorandum of Understanding (MMoU)
• Review relevant ICPs and standards
• Guidance on supervisory colleges and group-wide supervisor
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Standard Implementation
Challenge:
Enhancing standard implementation activities and minimising crossborder regulatory arbitrage
IAIS Response:
• Develop IAIS policy on implementation and assessment
• Exploring a peer review framework to foster adherence to IAIS Principles
and Standards
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New Global Supervisory Architecture
Challenge:
G20 and Financial Stability Board (FSB) issue recommendations and
monitor implementation
IAIS Response:
• IAIS representation on FSB including relevant Working Groups
• Ensure appropriate treatment of insurance in within FSB activities
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Outlook
• All financial sector supervisors can learn from the
recent financial crisis - future crises might be
different
• Identify the role of insurance in the context of
global financial stability
• Strengthen implementation and cooperation
• Move towards globally consistent regulation and
supervision of the insurance industry
• Minimise cross-border and cross-sector
regulatory arbitrage
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