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The IAIS Annual Conference concluded with commitment from supervisors to further enhance co-ordination efforts and move forward in the development of supervisory standards.
The IAIS discussed the need for co-operation and transparency especially in the context of the current financial crisis. Structural improvements need to be made at the global level to help avert crises in the future. Such initiatives include further development of supervisory colleges to help co-ordinate supervisory efforts as well as to improve the oversight of large groups.
There was a general call for the development of a truly global solvency system which responds to these issues and can draw on the merits of many current approaches.
There is also a need to understand the economic substance of transactions and products. The supervisory framework should be responsive to new developments, with a principles-based approach focussed on identifying and understanding risks.
On the supervision of insurance groups panellists cautioned on the dangers of not also considering the qualitative elements of any solvency assessment framework. Governance, risk management and internal controls were described as critical components of the early warning systems in supervision – especially in group supervision – and adequate attention to these elements is essential.