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Abbreviation | IAIS |
---|---|
Formation | 1994 |
Type | Swiss Verein |
Headquarters | Centralbahnplatz 2, Basel, Switzerland |
Chair of the Executive Committee | Shigeru Ariizumi, Financial Services Agency of Japan |
Secretary General | Jonathan Dixon |
Affiliations | Bank for International Settlements |
Website | iaisweb |
The International Association of Insurance Supervisors (IAIS) is a voluntary membership organization of insurance supervisors from more than 200 jurisdictions, constituting 97% of the world's insurance premiums. It is the international standards-setting body for the insurance sector. [1] The IAIS was established in 1994 and operates as a verein, a type of non-profit organisation under Swiss Civil Law. [2]
The IAIS' mission is to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to the maintenance of global financial stability. [3]
The IAIS' activities are supported by its secretariat and headed by a secretary general. The IAIS is hosted by the Bank for International Settlements (BIS).
The IAIS works in partnership with BIS-hosted committees such as the Basel Committee on Banking Supervision (BCBS) and the Committee on Payments and Market Infrastructure (CPMI), as well as other BIS-hosted entities such as the Financial Stability Board (FSB), the Financial Stability Institute (FSI) and the International Association of Deposit Insurers (IADI). The IAIS also works closely with other standard-setting bodies not hosted by the BIS, such as the International Organisation of Securities Commissions (IOSCO).
The IAIS delivers on its mission through a committee system made up of its members. The Committee system is led by an executive committee whose 38 members come from different regions of the world, representing advanced and developing insurance markets.
The executive committee is supported by the following five Committees established under its by-laws: [4]
Committees may establish subcommittees to help carry out their duties.
Guided by its strategic plan, [5] the IAIS develops a two-year roadmap [6] setting out the specific projects that the IAIS will undertake over the next two years. Projects and activities contained within the roadmap can be broadly divided into three categories:
The IAIS coordinates its work with other standard-setting bodies, international financial policymakers and associations of supervisors or regulators. In particular, the IAIS is a member of the:
The IAIS also participates as an observer or partner with numerous other organisations, including the Arab Union of Insurance Regulatory Commissions (AUIRC), Asian Forum of Insurance Regulators (AFIR), [10] Association of Latin American Insurance Supervisors (ASSAL), Consultative Group to Assist the Poor (CGAP), European Insurance and Occupational Pensions Authority (EIOPA), [11] Financial Action Task Force (FATF), [12] International Actuarial Association (IAA), [13] International Organisation of Pension Supervisors (IOPS), [14] Islamic Financial Services Board (IFSB), National Association of Insurance Commissioners (NAIC), [15] Group of International Insurance Centre Supervisors (GIICS), [16] the Insurance and Private Pensions Committee (IPPC) of the Organisation for Cooperation and Development (OECD), and the G20/OECD Financial Consumer Protection Task Force.
The IAIS is also a founding partner of the Access to Insurance Initiative, a multi-stakeholder partnership with the mission to inspire and support insurance supervisors to promote inclusive and responsible insurance. [17]
The IAIS holds Committee meetings and subcommittee meetings to progress its work, which are open to its members (insurance supervisors) only.
The IAIS also hosts public events. It hosts a virtual Global Seminar offering insurance supervisors and stakeholders an opportunity to discuss current and globally significant matters impacting the insurance sector, as well as the IAIS' most recent activities. It also holds an in-person Annual Conference which is open to supervisors and stakeholders to discuss topical issues and progress on IAIS activities. In conjunction with this conference, it convenes an Annual General Meeting of members where it conducts official business.
The IAIS also regularly publishes supporting material in the form of Application Papers [18] and Issues Papers. [19] Recently published papers have covered a wide range of topics, including sustainability and climate risk, corporate governance, fair treatment of customers, cyber risk and Fintech.
The IAIS financial stability activities are supported by an annual publication of the Global Insurance Market Report (GIMAR). The GIMAR contains a general description of developments in the global insurance sector as well as the outcome of the IAIS annual global monitoring exercise, i.e. the IAIS assessment of systemic risk in the global insurance sector. Finally, it includes the outcomes of an annual survey on the global reinsurance market. [20]
The IAIS publishes a regular newsletter outlining recent and upcoming activities. [21]
In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to the risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as "systematic risk".
Banking regulation and supervision refers to a form of financial regulation which subjects banks to certain requirements, restrictions and guidelines, enforced by a financial regulatory authority generally referred to as banking supervisor, with semantic variations across jurisdictions. By and large, banking regulation and supervision aims at ensuring that banks are safe and sound and at fostering market transparency between banks and the individuals and corporations with whom they conduct business.
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III.
The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten (G10) countries in 1974. The committee expanded its membership in 2009 and then again in 2014. As of 2019, the BCBS has 45 members from 28 jurisdictions, consisting of central banks and authorities with responsibility of banking regulation.
The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, Groupe d'action financière (GAFI), is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering and to maintain certain interest. In 2001, its mandate was expanded to include terrorism financing.
The Asia/Pacific Group on Money Laundering (APG) is a FATF style regional inter-governmental (international) body, the members of which are committed to effectively implementing the international standards against money laundering, the combating the financing of terrorism (CFT) and financing the proliferation of weapons of mass destruction. APG was founded in 1997 in Bangkok, Thailand, and currently consists of 42 member jurisdictions in the Asia-Pacific region and a number of observer jurisdictions and international/regional observer organisations.
The Financial Supervisory Service (FSS) is South Korea's integrated financial regulator that examines and supervises financial institutions under the broad oversight of the Financial Services Commission (FSC), the government regulatory authority staffed by civil servants.
The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory institution that replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). It is established under EU Regulation 1094/2010.
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established in the 2009 G20 Pittsburgh Summit as a successor to the Financial Stability Forum (FSF). The Board includes all G20 major economies, FSF members, and the European Commission. Hosted and funded by the Bank for International Settlements, the board is based in Basel, Switzerland, and is established as a not-for-profit association under Swiss law.
The Committee of European Banking Supervisors (CEBS) was an independent advisory group on banking supervision in the European Union (EU). Established by the European Commission in 2004 by Decision 2004/5/EC, and its charter revised on 23 January 2009, it was composed of senior representatives of bank supervisory authorities and central banks of the European Union. On 1 January 2011, this committee was succeeded by the European Banking Authority (EBA), which took over all existing and ongoing tasks and responsibilities of the Committee of European Banking Supervisors (CEBS). The European Banking Authority was established by Regulation (EC) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010.
Macroprudential regulation is the approach to financial regulation that aims to mitigate risk to the financial system as a whole. In the aftermath of the late-2000s financial crisis, there is a growing consensus among policymakers and economic researchers about the need to re-orient the regulatory framework towards a macroprudential perspective.
Basel III is the third Basel Accord, a framework that sets international standards for bank capital adequacy, stress testing, and liquidity requirements. Augmenting and superseding parts of the Basel II standards, it was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08. It is intended to strengthen bank capital requirements by increasing minimum capital requirements, holdings of high quality liquid assets, and decreasing bank leverage.
The European System of Financial Supervision (ESFS) is the framework for financial supervision in the European Union that has been in operation since 2011. The system consists of the European Supervisory Authorities (ESAs), the European Systemic Risk Board, the Joint Committee of the European Supervisory Authorities, and the national supervisory authorities of EU member states. It was proposed by the European Commission in 2009 in response to the financial crisis of 2007–08.
The European Systemic Risk Board (ESRB) is a group established on 16 December 2010 in response to the ongoing financial crisis. It is tasked with the macro-prudential oversight of the financial system within the European Union in order to contribute to the prevention or mitigation of systemic risks to financial stability in the EU. It shall contribute to the smooth functioning of the internal market and thereby ensure a sustainable contribution of the financial sector to economic growth.
A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".
The International Association of Deposit Insurers (IADI) was formed on 6 May 2002 with the purpose of sharing deposit insurance expertise with the world and contributing to the stability of financial systems as the standard setter for deposit insurance with a global and expanding membership.
At the heart of the prudential Solvency II directive, the own risk and solvency assessment (ORSA) is defined as a set of processes constituting a tool for decision-making and strategic analysis. It aims to assess, in a continuous and prospective way, the overall solvency needs related to the specific risk profile of the insurance company. Risk Management and own risk and solvency assessment is a similar regulation that has been enacted in the US by the NAIC. Other jurisdictions are enacting similar regulations to comply with the Insurance Core Principle 16 enacted by the IAIS.
European Banking Supervision, also known as the Single Supervisory Mechanism (SSM), is the policy framework for the prudential supervision of banks in the euro area. It is centered on the European Central Bank (ECB), whose supervisory arm is referred to as ECB Banking Supervision. EU member states outside of the euro area can also participate on a voluntary basis, as was the case of Bulgaria as of late 2023. European Banking Supervision was established by Regulation 1024/2013 of the Council, also known as the SSM Regulation, which also created its central decision-making body, the ECB Supervisory Board.
The Vienna initiative was a plan undertaken in January 2009 by European banks and governments during the height of the financial crisis to control the situation and work towards a joint solution specifically in developing regions of Europe. It has been created to avoid a bank crash that was threatening the region because of the subprime crisis as the liquidity in the CESEE countries depended on the Western ones. It is a forum where the representatives of the private and public economical sector from the Western countries but also Central, Eastern and South-Eastern European countries (CESEE) meet. This Initiative impacted much of those countries, notably Romania.