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Financial Sector Assessment Program


Last Updated: 12/21/2023

Issue: The Financial Sector Assessment Program (FSAP), jointly established by the International Monetary Fund (IMF) and the World Bank in 1999, is a comprehensive and in-depth analysis of a country's financial regulatory sector. The IMF and World Bank launched the FSAP in response to the financial crises of the late 1990s to assess members' financial systems. Financial systems include virtually all financial institutions, such as banks, asset managers, insurance companies, and the financial markets themselves (e.g., securities and foreign exchange). The previous FSAP reviews of the U.S. financial sector took place in 2010 and 2015, with the 2020 concluded in August 2020.

Overview: Supported by experts from a range of national agencies and standard setting bodies, the FSAP has the following aims: (i) to identify the strengths and vulnerabilities of a country's financial system in order to reduce crises; (ii) to determine how key sources of risk are being managed; (iii) to ascertain the financial sector's developmental and technical assistance needs and (iv) to help prioritize policy responses.

FSAP reviews have two main components: the financial stability assessment and–in developing and emerging market countries–the financial development assessment. In jurisdictions with financial sectors deemed by the IMF to be systemically important, financial stability assessments under the FSAP are mandatory and are supposed to take place every five years. Each individual country's FSAP concludes with the preparation of a Financial System Stability Assessment (FSSA).

To assess the stability of the financial sector, FSAP teams examine the soundness of the financial sectors; conduct stress tests; rate the quality of bank, insurance, and financial market supervision against accepted international standards; and evaluate the ability of supervisors, policymakers, and financial safety nets to respond effectively in case of systemic stress. For insurance, the Insurance Core Principles (ICPs) developed by the International Association of Insurance Supervisors (IAIS) form the basis for the assessment of jurisdictions' observance of international standards.

U.S. 2020 FSAP: The 2020 FSAP concluded on August 10, 2020 with the publication of various documents including most relevant for the insurance sector, the Financial System Stability Assessment (FSSA)Insurance technical note, and Risk Analysis and Stress Testing the Financial Sector technical note


The International Insurance Relations (G) Committee is charged to coordinate the NAIC's participation in the FSAP, including the referral of specific issues for consideration by other NAIC committees, task forces and/or working groups. As with previous FSAPs, the Committee will review the IMF recommendations and allocate, where appropriate, such recommendations to appropriate NAIC committees/working groups for further consideration.


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