Last Updated 9/25/19
Overview: Formed in 1994, the International Association of Insurance Supervisors (IAIS) represents insurance regulators and supervisors of more than 200 jurisdictions constituting 97% of the world's insurance premiums. The IAIS is the principal international organization of insurance supervisors, engaged in creating international standards and guidelines on insurance supervision, and encouraging members to implement the standards. Since its inception, the IAIS has worked to promote effective and globally consistent supervision of the insurance industry and has strived to contribute to global financial stability. The IAIS has no regulatory power or legal authority, but it influences national and regional regulators by publishing supervisory and supporting material, offering training and support, and advancing the latest developments in the supervision of insurance.
In October 2011, the IAIS adopted 26 revised Insurance Core Principles (ICPs), creating a new set of expectations for insurance supervisory system. The ICPs provide a globally accepted framework for the regulation and supervision of the insurance sector—they apply to insurance supervision in all jurisdictions regardless of the level of development. They are also utilized within the Financial Sector Assessment Program (FSAP) by the World Bank and the International Monetary Fund (IMF). Updates to certain ICPs were adopted in November 2018.
The IAIS continues to refine its work in a number of areas of insurance supervision. The IAIS is working to create a Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame has the goal of establishing a comprehensive framework for supervisors to address group-wide activities and risks of internationally active insurance groups (IAIGs) and also lay the groundwork for better supervisory cooperation and coordination. The IAIS initiated ComFrame to build on individual member efforts to improve group supervision and provide better insights to regulators on how IAIGs operate. As part of ComFrame, the IAIS is also developing a risk-based global insurance capital standard (ICS). Both of these have been developed over a multi-year period of field testing and refinement with supervisors and volunteer insurers. A public consultation on ComFrame and ICS Version 2.0 was launched by the IAIS in July 2018. According to the current IAIS workplan, ComFrame, including ICS Version 2.0, should be finalized and adopted towards the end of 2019 and ready for implementation by IAIS members in 2020.
In addition, the IAIS has been developing a holistic framework for the assessment and mitigation of systemic risk in the insurance sector. The framework sets out an activities-based approach (ABA) for sector-wide risk monitoring and management, as a key component of the framework, and tools for dealing with the build-up of risk within individual insurers. In 2019, the IAIS will review consultation comments and further refine the proposed elements in order to finalize by the end of the year and begin implementation in 2020. The goal is that an appropriately implemented framework will provide an enhanced basis for mitigating systemic risk in the insurance sector.
Status: As a founding member, the NAIC has a long history of leadership and engagement within the IAIS. State insurance regulators and/or NAIC staff are members of and serve in leadership roles on the various IAIS committees (Executive, Policy Development, Implementation and Assessment and Budget) and their subcommittees and are very active in almost all workstreams. This includes participating in conference calls and in-person meetings, contributing to drafting, analyzing data, commenting on papers and presenting information on relevant topics.
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