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Insurance Europe has responded to a Financial Stability Board (FSB) consultation on the identification of critical functions and critical shared-services in the context of recovery and resolution planning for systemically important insurers.
Insurance Europe welcomes the opportunity to respond to this consultation by the FSB on the identification of critical functions and critical shared services in the context of recovery and resolution planning for systemically important insurers.
Insurance Europe supports the FSB’s encouragement of cross-border supervisory co-operation on resolution and its efforts to develop a common understanding of critical functions. Insurance Europe believes that a transparent supervisory approach based on internation al standards is needed for the identification of critical functions and critical shared services.
Insurance Europe would highlight though that when applying a common understanding of critical functions, the differences between various business models should be taken into account.
Insurance Europe welcomes the recognition by the FSB that critical functions would differ according to jurisdiction and to particular market conditions. The FSB also acknowledges that, after applying the proposed methodology, very few critical functions are likely to be identified.
Insurance Europe concurs and would, therefore, question whether this is then the right approach to be taken in terms of the trade-off between regulatory burden and desired outcome.