Global - IAIS updates assessment methodology for G-SIIs
Source: Middle East Insurance Review | Jul 2016
As part of its three-year review cycle, the International Association of Insurance Supervisors (IAIS) released an updated Assessment Methodology (2016 Methodology) for global systemically important insurers, or G-SIIs. The latest version outlines a five-phase approach to the G-SII assessment process that includes fact-based qualitative and quantitative elements.
The IAIS has modified certain indicators used in the initial assessment methodology to address issues related to indicator responsiveness, connection with systemic risk and data quality, including reliability (across both insurers and jurisdictions).
In contrast to the initial methodology, the 2016 Methodology uses absolute reference values for derivatives trading (CDS or similar derivatives instrument protection sold), financial guarantees and reinsurance indicators. The 2016 Methodology also covers all types of insurance and reinsurance, and other financial activities of global insurers.
Revisions to the initial assessment methodology, which was first published in 2013, were informed by three previous designation exercises and public comments received on two IAIS consultation papers issued in November 2015.
The IAIS recently concluded its 9th Annual IAIS Global Seminar in Hungary, involving a wide-ranging discussion of global insurance issues. These included Global Capital Standards & the development of the ICS, G-SII assessment and designation process, selected insurance issues in developing markets, conduct of business supervision, implementation of Insurance Core Principles (ICPs), and cyber risk and insurance.