The IAIS endorses the Financial Stability Board’s (FSB) statements and related reports documents regarding a smooth and timely transition away from LIBOR by the end of 2021 and encourages insurance supervisors to strengthen their efforts in to facilitating facilitate insurers’ transition.
Given the limited time available until end-2021, the IAIS urges insurers to act now to complete the steps set out in the FSB’s global transition roadmap.
The IAIS endorses the Financial Stability Board’s (FSB) statements and related reports regarding a smooth and timely transition away from LIBOR by the end of 2021and encourages insurance supervisors to strengthen their efforts to facilitate insurers’ transition.
A distinct feature of benchmark transition risk in the insurance sector is that insurers may be exposed on both sides of their balance sheet – for instance on the asset side, through investments linked to LIBOR, or on the liability side, through valuation methodologies that reference benchmark rates. As noted by the FSB, continued reliance of financial markets on LIBOR poses clear risks to global financial stability. Transition away from LIBOR by end-2021 requires significant commitment and sustained effort from both financial and non-financial institutions across many jurisdictions.
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© IAIS - International Association of Insurance Supervisors
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