Out-Law News | 22 Nov 2017 | 11:12 am | 1 min. read
The nine insurers identified as G-SIIs by the FSB in November 2016 will retain the designation for the coming year. The FSB will continue to apply the stricter regulatory rules it set out at that time to those firms, minus the postponed higher loss absorbency requirement.
The FSB coordinates financial regulation across the 'group of 20' (G20) major global economies. It has traditionally updated its list of G-SIIs each November, based on the recommendations of the International Association of Insurance Supervisors (IAIS).
In a statement published on its website, the FSB said that it "welcomes and encourages" the work currently being done by the IAIS to develop an approach to assessing insurance risk based on the type of activity carried out by firms, rather than their size or their cross-border reach.
"[A]n Activities-Based Approach, once developed, may have significant implications for the assessment of systemic risk in the insurance sector and hence for the identification of G-SIIs and for G-SII policy measures," it said in a statement.
It said that it would review the situation on November 2018, "based on the progress made by the IAIS in developing the Activities-Based Approach at that time".
G-SIIs are the world's biggest insurers, defined as those whose financial difficulty or failure would threaten the stability of the wider economy. G-SIIs are subject to stricter regulatory requirements and, from 2019, will be required to hold greater amounts of capital in reserve under the risk-based group-wide global insurance capital standard, which is currently under development by the IAIS