BASEL, Switzerland, December 10 — The Financial Stability Board issued the press release following the December 9, 2022:
The Financial Stability Board (FSB) today issued the following public communication.
1. The FSB in consultation with the International Association of Insurance Supervisors (IAIS) considered whether to discontinue or reinstate an annual identification of Global Systemically Important Insurers (G-SII)/1 based on the early years of implementation of the IAIS holistic framework for assessment and mitigation of systemic risk in the insurance sector./2 The FSB has decided to no longer carry out the annual identification of G-SIIs. Going forward, the FSB will use the assessments available through the holistic framework to inform its considerations of systemic risk in the insurance industry.
2. The FSB will continue to receive from the IAIS an annual update of the results of its global monitoring exercise, including the IAIS’s assessment of systemic risk in the global insurance industry, possible concentration of systemic risks at the level of an individual insurer and prudential supervision. response to identified risks. To this end, the AICA will continue its annual data collection from individual insurers, supplemented by data collection from supervisors to support its assessment of industry trends with respect to specific activities and exposures, and its report annually to the public on the results of its evaluation and the progress made in the implementation of the monitoring policy measures of the holistic framework.
3. If circumstances warrant, the FSB may, in consultation with the AICA and national authorities, using the assessments available through the holistic framework as communicated by the AICA to the FSB, publicly express its views on the whether an individual insurer is systemically important in the global context and the appropriate application of holistic framework supervisory policy measures it deems necessary to address such systemic importance. Developing such a view may also require the FSB to ask the AICA to undertake further analysis.
4. Starting in 2023 and each year, the FSB will publish in the FSB’s annual resolution report and on the FSB’s website a list of insurers that – according to the member authorities’ assessment and self-declaration – are subject resolution planning and resolvability assessments in accordance with the key features of effective resolution regimes for financial institutions (KA) of the FSB. The FSB may publicly express its views on the adequacy and sufficiency of the range of insurers subject to KAs, depending on whether an insurer could be systemically significant or critical in the event of failure. The FSB will also work to develop additional guidance on approaches to determining the scope of KAs by jurisdictions. The AICA will contribute to the FSB’s resolvability monitoring and to the FSB’s annual public report.
5. IAIS will continue to improve the holistic framework, including continuing the regular triennial review of its assessment methodology.3 In accordance with this schedule, in November 2025 the FSB will also review its experiences with systemic risk assessment and mitigation processes based on the holistic framework. In light of this review, the FSB, in consultation with the IAIS, may decide to adjust its process, including, among other alternatives, the possibility of reinstating an updated G-SII identification process if this is deemed necessary.
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Notes to Editors
In 2011, the FSB published an integrated set of policy measures to address systemic and moral hazard risks associated with systemically important financial institutions (SIFIs)2. In 2013, the FSB, in consultation with the IAIS and national authorities, identified an initial list of G-SIIs using an assessment methodology developed by the IAIS, and the policy measures that should apply to them. . . In November 2014, 2015 and 2016, the FSB published an updated list of G-SIIs, based on the recommendations of the AICA. In 2017 and 2018, the FSB, in consultation with the IAIS and national authorities, decided not to engage in an identification of G-SIIs, while the IAIS was developing the holistic framework for the assessment and mitigation of systemic risk in the insurance industry.
In November 2019the CSF welcomed the finalization of the AICA holistic framework and stated that it would review the need to discontinue or reinstate an annual identification of G-SIIs by the FSB in consultation with the AICA and national authorities in November 2022based on the first years of implementation of the holistic framework.
The IAIS is a global standards body whose objectives are to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to the maintenance of a global financial system. stability. Its members include insurance supervisors from over 200 jurisdictions. Further details on the AICA’s holistic framework and its public consultation seeking input on the Individual Insurer Monitoring (IIM) Assessment Methodology used to calculate the systemic risk of individual insurers, which is launching today , are available here.
The FSB coordinates at the international level the work of national financial authorities and international standards bodies and develops and promotes the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. . It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, international industry groupings of regulators and supervisors, and central bank expert committees. The FSB also conducts outreach to approximately 70 other jurisdictions through its six regional advisory groups.
The FSB is chaired by Klaas knotPresident of From Nederlandsche Bank. The FSB Secretariat is located at Basel, Switzerlandand hosted by the Bank for International Settlements.
Footnotes :
1/ FSB (2019) Finalization of the IAIS holistic framework for the assessment and mitigation of systemic risk in the insurance industry, November
2/ IAIS (2019) Holistic Framework for Systemic Risk in the Insurance Sector, November
3/ The IAIS will shortly launch a public consultation to finalize its triennial review of the individual insurer monitoring methodology, based on information gained from the implementation of the global monitoring exercise over the past three years.
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Original text here: https://www.fsb.org/2022/12/the-fsb-endorses-an-improved-framework-for-the-assessment-and-mitigation-of-systemic-risk-in-the-insurance-sector- and-discontinues-the-annual-identification-of-global-systemically-important-insurers/
