Last Updated 8/25/20
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 November 2019, the IAIS adopted its latest version of revised Insurance Core Principles (ICPs), which provide a globally accepted framework for the regulation and supervision of the insurance sector. The 24 ICPs cover a variety of topics that are key to having a sound supervisory system, and they apply to insurance supervision in all jurisdictions regardless of the level of development. They are also used within the Financial Sector Assessment Program (FSAP) by the World Bank and the International Monetary Fund (IMF).
Also in November 2019, the IAIS adopted its Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame establishes a comprehensive framework for supervisors to address group-wide activities and risks of internationally active insurance groups (IAIGs) and lays the groundwork for better supervisory cooperation and coordination. As part of ComFrame, the IAIS is also developing a risk-based global insurance capital standard (ICS). ICS Version 2.0 was adopted in November 2019. 2020 began a 5-year monitoring period during which a reference ICS will be used for confidential reporting to group-wide supervisors and discussion in supervisory colleges. Additionally, as part of this ongoing work, the IAIS has recognized the U.S. work on an aggregation approach and will assess by the end of the monitoring period whether the Aggregation Method reaches comparable outcomes to the ICS.
A third key milestone in November 2019 was the adoption of a holistic framework for the assessment and mitigation of systemic risk in the insurance sector. In developing the holistic framework, the IAIS has moved beyond the previous entities-based approach and identifying global systemically important insurers (G-SIIs) and incorporated an activities-based approach (ABA). The holistic framework's key elements include: 1) enhanced set of supervisory policy measures; 2) global monitoring exercise; and 3) implementation assessment. The goal is that an appropriately holistic implemented framework will provide an enhanced basis for mitigating systemic risk in the insurance sector and therefore future identification of G-SIIs will not be necessary.
As IAIS members begin to implement the revised ICPs, ComFrame and the holistic framework in 2020, the IAIS is also in the process of putting greater focus on emerging risks, challenges and opportunities (such as innovation and technology, cyber, climate and sustainability) and supporting supervisory practices as well as implementation and assessment of its supervisory material.
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, Macroprudential, 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.