In response to thee increasing globalisation in the insurance sector combined with the key lessons learned from the financial crisis, the International Assn. of Insurance Supervisors (IAIS), based in Basel Switzerland, is building the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame).
This framework is designed to foster cooperation among supervisors and close regulatory gaps. The IAIS is addressing these issues as it seeks to improve the supervision of Internationally Active Insurance Groups (IAIGs) and has made a significant move towards this by announcing the release, for comment, of a Concept Paper for ComFrame.
*Develop methods of operating group-wide supervision of IAIGs in order to make group-wide supervision more effective and more reflective of actual business practices;
*Establish a comprehensive framework for supervisors to address group-wide activities and risks and also establish principles for better supervisory cooperation in order to allow for a more integrated, international approach; and,
*Foster global convergence of regulatory and supervisory measures and approaches.
The release of the Concept Paper is the first milestone in the three-year development phase of ComFrame to be completed by 1 July 2013. ComFrame draws on prior work of the IAIS to strengthen group-wide supervision. The IAIS will then proceed to the calibration phase during which impact studies will be undertaken to evaluate quantitative requirements, in particular.
In commenting on ComFrame, Peter Braumüller, Chair of the IAIS Executive Committee, said, “A global framework for the supervision of internationally active insurers is one of the most important initiatives on IAIS’s agenda. It will not only enhance the effectiveness and efficiency of supervision of these groups, but also contribute to our continuing efforts toward stability in insurance markets around the world.”
About the IAIS:
The IAIS is a global standard setting body whose objectives are to promote effective and globally consistent regulation and 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 global financial stability. Its membership includes insurance regulators and supervisors from over 190 jurisdictions in some 140 countries. More than 120 organisations and individuals representing professional associations, insurance and reinsurance companies, international financial institutions, consultants and other professionals are observers.