Office of the Chief Information Officer (OCIO) 1

Presentation to the Federal Advisory Committee on Insurance

June 1, 2023

Federal Insurance Office

International Association of Insurance Supervisors

Key Meetings and Projects
Overview

Recent and upcoming meetings and activities of the International 

Association of Insurance Supervisors (IAIS)

Key Projects include:

▪ Insurance Capital Standard (ICS)

▪ Aggregation Method (AM) Comparability Assessment

▪ Climate

▪ Diversity, Equity & Inclusion (DEI)

▪ Macroprudential / Global Monitoring

▪ Resolution

▪ Cyber Risk, IT/Third-Party Outsourcing, and Operational Risk

▪ Strategic Plan

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IAIS Meetings and Activities – Upcoming

 June 12-14: ExCo and other Parent Committee Meetings. Anticipated topics include:

• Continued development of the IAIS 2025-2029 Strategic Plan.

• Macroprudential Policy Committee (MPC) and the Executive Committee (ExCo) will consider the 

first outcomes of this year’s GME data collections and MPC activities and discuss the scope of its 

collective discussion.

• Proposed IAIS public consultations in June:

➢ Candidate ICS as a prescribed capital requirement (PCR)

➢ ICS Economic Impact Assessment 

➢ Revised Insurance Core Principles (ICPs) on Valuation (ICP 14) and Capital Adequacy (ICP 

17). 

 June 15-16: Global Seminar

• Agenda topics include: insurtech; climate risk and supervisory practices; 2025-2029 Strategic 

Plan; emerging risks; natural catastrophe protection gaps; and the ICS

 June 21: Chief Risk Officer Roundtable

 September 20-22: MPC collective discussion and ExCo Strategic Retreat

 November 6-10: ExCo and Parent Committee Meetings, Annual General Meeting, and Annual 

Conference

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IAIS Meetings and Activities – Recent

 January 27: Held virtual stakeholder event on scope of the ICS Economic Impact Assessment.

 January 30: Hosted ICS Global Roundtable of Supervisors to solicit views from groupwide 

supervisors on their experience and views on the performance of the reference ICS.

 February 9: Held stakeholder session on the IAIS’s work on DEI in the insurance industry

 February 13: Published for consultation Issues Paper on roles and functioning of Policyholder 

Protection Schemes.

 March 6-8: Held Executive Committee (ExCo) and other parent committee meetings

 March 9: Following a public consultation, published final criteria that will be used to assess 

whether the AM provides comparable outcomes to the ICS

 March 16: Launched consultation on climate risk related amendments to Insurance Core Principles 

(ICP) Introduction and supporting material for ICP 7 (Corporate Governance) and ICP 8 (Risk 

Management and Internal Controls)

 April 4: Published report assessing implementation of the Holistic Framework for the assessment 

and mitigation of systemic risk in the insurance sector in ten major markets

 April 21: Published Global Insurance Market Report (GIMAR) special topic on cyber risk

 April 28: Published statement affirming IAIS’s commitment to support insurance supervisors’ 

actions to address natural catastrophe protection gaps. 

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To Date in 2023

▪ ICS confidential reporting package released in April, with submission deadline of August 31. 

▪ IAIS collecting data in 2023 on (1) reference ICS and (2) candidate ICS as a PCR. 

▪ ICS volunteer virtual workshop held on May 9 to launch the 2023 data collection exercises. 

Later in 2023

▪ Stakeholder session scheduled for June 16 at the Global Seminar in Seattle. 

▪ IAIS to provide update on the ICS work; and

▪ Panel discussion on the public consultation of the candidate ICS as a PCR and the ICS 

Economic Impact Assessment.

▪ Following Seattle committee meetings, the IAIS to release public consultations on:

➢ Proposed changes to ICP 14 (Valuation) and ICP 17 (Capital Adequacy) to reflect the 

changes made to date to the ICS framework; and 

➢ Potential design of the candidate ICS as a PCR, including consultation on the ICS 

Economic Impact Assessment.

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ICS: Headed Towards Implementation
AM Comparability Assessment: An Update

Background

▪ The IAIS aims to be in a position by the end of the monitoring period to assess whether the AM provides 

comparable outcomes to the ICS. If so, the AM will be considered an outcome-equivalent approach for 

implementation of the ICS as a PCR.

▪ In May 2021, the IAIS published the final definition of comparable outcomes and high-level principles, 

governing the development of the criteria to be used in the comparability assessment.

▪ FIO continues to work closely with the Federal Reserve Board, the U.S. states, and the National 

Association of Insurance Commissioners (NAIC) in bringing about a meaningful comparability 

assessment.

Status

▪ After a public consultation and additional stakeholder feedback in 2022, the IAIS finalized the criteria 

that will be used to assess whether the AM produces comparable outcomes to the ICS. 

▪ The AM data collection was released on April 28, 2023, including data needs for the upcoming 

comparability assessment. 

▪ The IAIS held a virtual AM volunteer launch workshop on May 11, 2023.

▪ The AM comparability assessment is scheduled to take place in Q3 2023 concurrently with the public 

consultation of the candidate ICS as a PCR.

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Questions for FACI Members on ICS and AM Work

➢What are your views on the progress of the ICS 

and/or AM comparability work at the IAIS?

➢Should the IAIS consider additional stakeholder 

engagement in 2023? If yes, when and in what form?

➢What are your views on the transparency of the AM 

comparability work?

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Background

▪ Together with the Sustainable Insurance Forum, IAIS has published:

▪ 2018: Issues Paper on Climate Change Risks to the Insurance Sector

▪ 2020: Issues Paper on the Implementation of the Recommendations of the FSB Taskforce on 

Climate-related Disclosures (TCFD)

▪ 2021: Application Paper on the Supervision of Climate-related Risks in the Insurance Sector

▪ 2021: IAIS launched its Climate Risk Steering Group to coordinate its climate risk work.

▪ September 2021: GIMAR special topic edition on the insurance sector’s investment exposures to 

climate-related risks provided first quantitative global study on the topic.

▪ 2022: IAIS added more climate data elements to the Global Monitoring Exercise (GME).

▪ 2022: Performed gap analysis of existing IAIS supervisory material to assess how climate risk is 

already captured and to identify potentially further work on standard-setting and guidance on 

supervisory practices.

Status

▪ Added additional refinements and data elements to the 2023 GME.

▪ Issued in March 2023 a public consultation on climate risk related amendments to Insurance Core 

Principles (ICP) Introduction and supporting material for ICP 7 (Corporate Governance) and ICP 8 

(Risk Management and Internal Controls)

▪ Subsequent climate-risk related consultations will include scenario analysis and market conduct 

related topics.

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IAIS Climate Work
Questions for FACI Members on IAIS Climate Work

➢What are your views on the progress of the work on 

climate-related risk at the IAIS?

➢Do you have suggestions on issues to explore in 

future consultations to improve the usability of the 

climate risk related Issue and Application Papers?

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Background

▪ December 2022: IAIS published stock-take report on actions that IAIS member supervisors, other 

international organizations, and the insurance industry are taking to advance DEI in the insurance 

sector. This stock-take was a first step to inform further IAIS work to promote DEI in insurers’ 

governance and conduct of business.

Status

• February 2023: IAIS hosted a stakeholder session on the findings from the DEI stock-take and 

provided an overview of future work.

• IAIS plans to continue work to help insurance supervisors further understand the benefits of DEI, the 

connection between promoting DEI and their supervisory mandates and the range of available 

supervisory practices to promote DEI. 

• Main foci of future DEI work:

1) The link between DEI within insurers’ own governance, risk management and corporate culture 

2) How DEI considerations in insurers’ conduct of business, and their supervision, may result in 

fairer treatment of consumers who are vulnerable, under-served, or have specific needs.

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IAIS Diversity, Equity & Inclusion Work
Questions for FACI Members on IAIS DEI Work

➢What are your views on the progress of the DEI work 

at the IAIS?

➢What are your views on how the IAIS can further 

explore the issue of DEI in its projects going 

forward?

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Background

▪ The IAIS’s annual GME aims to detect key risks and trends and the potential build-up of systemic 

risk in the global insurance sector, including a discussion among IAIS members on the outcomes of 

the analysis and the appropriate supervisory responses. It covers:

▪ Sector-Wide Monitoring (SWM): Potential systemic risk arising from sector-wide trends with 

regard to specific activities and exposures

▪ Individual Insurer Monitoring (IIM): Possible concentration of systemic risks at an individual 

insurer level arising from these activities and exposures. 

▪ The key outcomes of the GME and the IAIS's collective discussion on the analysis and supervisory 

responses are shared with the FSB and included in the IAIS’s annual GIMAR.

Status

• Before the March launch of the 2023 GME, the IAIS further refined and enhanced the data collection 

on climate-related risk and cyber risk

• The IAIS is concluding a review of the IIM assessment methodology (as part of a three-year cycle), 

taking into account the outcomes of the recent public consultation. 

• The liquidity metrics as an ancillary indicator continue as part of the IIM and GME process. 

• Further ancillary indicators are being explored for development in 2023, notably on credit risk, cyber 

risk, and climate-related risk. 

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IAIS Macroprudential Work: GME
Background

▪ Through the 2022 GME process and as reported in the 2022 GIMAR, the IAIS identified three 

macroprudential themes based on supervisory priorities identified by members in the annual SWM: 

(1) lower macroeconomic outlook, high inflation and rising interest rates

(2) structural shifts in the life insurance sector, including the involvement of private equity

(3) climate-related risks

Status

▪ This year, the IAIS is continuing this work through additional monitoring and analysis of market 

trends and supervisory responses related to the following three topics: 

1. The impact of high inflation and rapidly-tightening interest rates on the insurance sector, 

particularly with respect to credit risk and liquidity risk

2. Structural shifts in the life insurance sector, including the involvement of private equity. This will 

include a deep dive on related activities, such as increased cross-border reinsurance 

3. Changes in asset allocation towards more complex, illiquid investments.

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IAIS Macroprudential Work: Analysis of Sector-Wide 

Themes
Questions for FACI Members on IAIS 

Macroprudential Work

➢What are your views on the progress of the 

macroprudential work at the IAIS?

➢What are your views on last year’s risk themes and 

how they have advanced to additional work this 

year? 

➢What are your thoughts on potential macroprudential 

risk themes for discussion this year?

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IAIS Resolution Work

Background

▪ The Resolution Working Group (ReWG) at the IAIS addresses matters relating to resolution of 

insurers that includes developing and maintaining supervisory materials on insurance resolution, 

dealing with all standard-setting matters regarding resolution initiated by FSB, and representing the 

IAIS at relevant working parties within the FSB, such as Steering Group on Resolution (ReSG) and 

insurance Cross-border Crisis Management (iCBCM) group.

▪ The iCBCM works under the direction of the FSB’s ReSG and in coordination with the IAIS ReWG, 

to develop guidance for resolution powers and tools regarding G Global Systemically Important 

Insurers (G-SIIs) as well as addressing issues relating to their application. Both FIO and the Federal 

Reserve are members of the iCBCM.

Status

▪ Throughout 2022, the ReSG, through the iCBCM and in consultation with the IAIS, examined 

possible ways to ensure monitoring of effective application of the resolution planning standards if the 

identification of G-SIIs is discontinued and replaced by the Holistic Framework.

▪ In January 2022, the iCBCM published Practices Papers on interconnectedness as it affects 

resolution planning, and the identification of funding sources in resolution; these were followed by a 

technical workshop on these topics for industry and authorities in July 2022. 

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Questions for FACI Members on IAIS Resolution Work

➢Do FACI members have any views on the progress of 

the resolution work at the IAIS?

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Background

▪ 2021: The IAIS committed to:

1) Developing supervisory supporting guidance and material in the field of operational 

resilience, specifically on information technology (IT) third-party outsourcing and 

insurance sector cyber resilience and 

2) Directing the Operational Resilience Task Force to look at integrating lessons on 

ensuring business continuity (over an extended period) into supervisory guidance. 

▪ The IAIS has actively engaged in the work of the Financial Stability Board (FSB) on cyber 

resilience:

▪ Participates in the FSB’s Cyber Incident Reporting Working Group.

▪ Provided input into the FSB’s work on outsourcing and third-party relationships.

Status

▪ April 2023: Published a GIMAR special topic on cyber risks containing an analysis of the 

risks and trends associated with cyber insurance coverage, cyber resilience in the 

insurance sector, and the potential impact these risks on financial stability.

▪ In May 2023, the IAIS published an Issues Paper on Insurance Sector Operational 

Resilience. The objective of the paper was to identify issues that impact operational 

resilience in the insurance sector and to provide examples of how supervisors are 

approaching these developments, considering lessons learned during the Covid-19 

pandemic. 17

IAIS Work on Cyber Risk, IT Third-Party Outsourcing, 

and Operational Risk
Questions for FACI Members on IAIS Cyber Risk, IT 

Third-Party Outsourcing, Operational Risk Work

➢What are your views on the progress of the cyber and 

operational risk work at the IAIS?

➢How might the IAIS advance its operational resilience 

work in a manner unique to the insurance sector?

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▪ In April, the FACI International Subcommittee met to discuss the IAIS’s strategic 

themes, as the IAIS develops the next 5-year work plan. This input was requested to 

help inform FIO in its response to the IAIS on the priorities that should be considered in 

the work ahead.

▪ Subcommittee members were asked for their views on how the IAIS should prioritize 

each of its cross-cutting strategic themes: 

1) Climate risk, 

2) Conduct and culture, 

3) Digital transformation, 

4) Diversity, equity and inclusion, 

5) Financial inclusion, and 

6) Operational resilience and cyber risk. 

▪ FACI subcommittee members were in broad agreement with the IAIS’s strategic 

themes, also highlighting the need for work in the area of protection gaps.

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FACI Input on IAIS Strategic Themes