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This first paper outlines the lessons learnt from the financial crisis and the banking sector affecting the insurance sector, as well as the current status of debate within the sector.
The paper identifies and analyses the sources of systemic risk in insurance outlining three potential sources: entity-based, activity-based and behaviour-based.
The paper also includes a proposal for a macroprudential framework for insurance and defines specific operational objectives based on the previously-identified sources of systemic risk.
EIOPA developed its own view building on the available sources produced by academia, standard setting bodies, national authorities and the industry. In particular, EIOPA elaborates several of the concepts that are also used in other fora such as the IAIS. Although EIOPA’s approach and position might not always be fully adherent to the IAIS approach (see IAIS, 2017b), the outcomes presented in this paper is broadly consistent with it.