Insurance Europe supports the work conducted by the IAIS in the area of systemic risk and financial stability with the objective of developing an approach that is appropriately tailored to the specificities of the insurance sector.
We welcome this opportunity to provide comments on the measures for Global Systemically Important Insurers (G-SIIs). However in the absence of further detail on the IAIS methodology for identifying G-SIIs and more specifically on activities considered systemically risky, it is difficult to deliver precise comments on the proposed measures. This is especially so given the need for measures to be carefully tailored to address the causes of systemic risk with the intent of reducing a G-SII’s risk profile and ultimately removing it from the GSII list.
It is essential that the policy measures are designed so that they target the identified systemically risky activities an entity engages in and are proportionate to the potential of the activity to create systemic risk. In our view a number of the proposed measures do not meet these objectives and in certain cases have the potential to expose the insurance sector to a greater level of risk as opposed to reducing it.