As part of global insurance regulatory reform, IAIS members are expected to implement the Insurance Core Principles (ICPs) into their national supervisory frameworks. ICP compliance is assessed by the IMF and World Bank who conduct annual Financial Sector Assessment Programme (FSAP) reviews on both a mandatory and voluntary basis. Mandatory FSAP assessments are required every five years for countries whose financial systems have been deemed by the IMF to be systemically important.
There are currently 26 ICPs, which can be divided into five broad categories:
The IAIS began a three year review of all ICPs in 2015:
The IAIS also announced in January 2016 that it plans to issue a consultation document in mid 2016 proposing the application of recovery and resolution requirements applicable to all insurers. To date, only the nine G-SIIs have been subject to such requirements and the announcement of this extention has surprised many, with significant concerns regarding how this will be constructed to ensure it is proportionate to the rest of the insurance sector.
These reviews include an analysis of compliance with relevant international standards, which for the insurance sector means an assessment of compliance with ICPs. As a result, we have seen a global drive among regulators over recent years to demonstrate ICP compliance. The most recent FSAP review for those countries whose financial systems have been deemed by the IMF to be systemically important is set out on page 6 of this chapter.
2015 saw the release of the Detailed Assessment of Observance on ICP’s Compliance reports on South Africa (March), United States (April) and Ireland (May). Among the findings of these three reports, and the the four issued in 2014 (Switzerland, Canada, Hong Kong and Denmark):