27 April 2017

BIS: High-level meeting on global insurance standards and supervisory priorities in the Americas

The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS), together with the International Association of Insurance Supervisors (IAIS) and the Association of Insurance Supervisors of Latin America (ASSAL), held its first high- level meeting in the insurance sector.

Ms Victoria Saporta, Chair of the IAIS Executive Committee, outlined the recent standard-setting work of the IAIS. She focused on ComFrame - the Common Framework for the supervision and regulation of internationally active insurance groups - and the global Insurance Capital Standard (ICS), both of which are scheduled for adoption in late 2019. In this context, she highlighted that "supervisory exchange is integral to strengthening supervision and responding to innovation. By learning from our peers, sharing information, and getting together in forums both virtual and physical, we learn".

Mr Yoshihiro Kawai, Secretary General of the IAIS, emphasised the importance of regulatory convergence as a way to strengthen the resilience of internationally active insurance groups, promote a level playing field and facilitate supervisory cooperation. He invited ASSAL members to increase their involvement in the standard setting and other workstreams of the IAIS.

Participants around the table shared their experiences and challenges in modernising and adapting their regulatory regimes to international standards. Some countries have launched or are in the process of introducing new solvency frameworks, while others are planning to implement risk-based approaches to capital over a longer time horizon.

Another supervisory priority for the region is the supervision of reinsurance and reinsurers. This is particularly relevant to the countries that have opened up their borders to foreign reinsurers, many of which are internationally active. Assessing their quality is essential, but the tools for doing so are often limited. Supervisory cooperation across borders is evolving, and many regulatory frameworks are in the process of being updated with more stringent confidentiality requirements to enable them to safely exchange information between themselves.

The last topic of the meeting was related to fintech innovations. The financial sector is rapidly changing, with new technologies and possibilities developing at the same time as new risks are emerging. The insurance penetration rates in the region are set to increase as digital technology makes it possible to reach broader markets at more affordable cost. Several countries in the region already have startups and "sandboxes", which are being followed closely so as to assess the risks without stifling the potential positive effects of innovation and competition.

Press release

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