The International Association of Insurance Supervisors (IAIS) has released for public comment certain revised Insurance Core Principles (ICPs) with integrated ComFrame guidance. The consultation covers the following topics:
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ICP 3: Information Sharing and Confidentiality Requirements [addresses information sharing among regulators and other governmental authorities]
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ICP 5: Suitability of Persons [addresses required qualifications for directors, officers and other key executives; consultation covers only ComFrame guidance]
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ICP 7: Corporate Governance [addresses requirements for insurers’ corporate governance framework; consultation covers only ComFrame guidance]
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ICP 8: Risk Management and Internal Controls [addresses required risk management and internal controls, including compliance, actuarial matters and internal audit; consultation covers only ComFrame guidance]
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ICP 9: Supervisory Review and reporting [addresses regulators’ examination authority over insurers’ business, financial condition, market conduct, corporate governance, risk profile and legal compliance]
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ICP 10: Preventative Measures, Corrective Measures and Sanctions [addresses preventive and corrective measures and sanctions that may be imposed by regulator to avoid or respond to breaches of regulatory requirements (includes recovery planning)]
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ICP 12: Exit from Market and Resolution [addresses pre-resolution planning as well as the powers that a supervisor should have in resolution (portfolio transfer, run-off, restructuring, liquidation)]
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ICP 25: Supervisory Cooperation and Coordination [addresses cross-border cooperation and coordination among regulators and other governmental authorities]
We are still analyzing the multiple documents that were released, but we wanted to flag for your attention the guidance regarding recovery planning. Under ICP 10, every Internationally Active Insurance Group (IAIG) would be required to develop a recovery plan, and supervisors would have discretion to require recovery plans from certain insurers that are not IAIGs. ICP 10 describes what an IAIG’s recovery plan should include and lays out possible measures for returning the IAIG to financial health. IAIGs and aspiring IAIGs will want to pay close attention to the recovery planning guidance and should consider submitting comments to the IAIS. Comments are due on June 1, 2017.
