Insurance Europe has responded to a consultation by the International Association of Insurance Supervisors (IAIS) on its Holistic Framework. The Framework is a set of supervisory policy measures, a Global Monitoring Exercise (GME), and implementation assessment that reviews and mitigates systemic risk in the insurance sector, including through recovery and resolution planning requirements (RRP).
Insurance Europe supports the need for recovery and resolution planning requirements where there is a clear need, assessed through risk-based criteria. However, the federation of insurance associations objects to the IAIS’s proposals to extend supervisory expectations for RRP – noted under ICP 12 and ICP 16 – which, it argues, goes too far. The federation highlights that, as a minimum standard, the IAIS’s existing requirements are sufficient, and any additional requirements should remain at jurisdictional level to reflect the specifics of each local market.
It further opposes the proposal to apply the RRP requirements for all insurers. Expecting all insurance companies, Insurance Europe notes, to draw up a recovery and resolution plan is neither, “necessary from a risk perspective, nor is it proportionate to implement, as the effort involved is high even for small insurance companies’’. The scope of RRP requirements should be fully risk-based and be primarily focused on group-level requirements.
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