Joint Comments on the FSB's consultative document on Effective Resolution of SIFIs

02 September 2011

The General Insurance Association of Japan (GIAJ), together with 16 other insurance associations around the world, has submitted comments on the Financial Stability Board's consultative document on Effective Resolution of Systemically Important Financial Institutions.

It seems to be the FSB’s intention to expand its framework on resolution to the insurance sector at a later stage, as mentioned in Annex 12. In this process, due consideration should be given to the following points:

• Any proposals should give due consideration to the insurance business model and to the orderly winding-up procedures already existing in insurance regulation.
• The work of the FSB on such a framework for the insurance sector should, if proven suitable, only come at a later stage, given that the discussions at the IAIS level on both the methodology to identify insurance undertakings as systemically relevant, and the legal consequences of a SIFI-designation are still at an early stage.
• Any extension of the FSB’s resolution framework to the insurance sector should take into account work underway at the IAIS and coordinate with governments on the criteria and timing of SIFI designation by the individual countries.

The INIA members would like to thank the FSB for the opportunity to raise the insurance sector's concerns. An effective dialogue with the FSB as well as a response to the points raised in this letter would be highly appreciated.

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