02 July 2012

IAIS: 2012 Draft of Common Framework for Supervision of Internationally Active Insurance Groups

The IAIS released its 2012 draft of the Common Framework for the Supervision of IAIGs, or ComFrame, marking the completion of the second step in its three-year Development Phase. Supervisors, insurers and other interested parties are encouraged to submit comments by 31 August.

ComFrame is an integrated, multilateral and multidisciplinary framework for the group-wide supervision of internationally active insurance groups, or IAIGs. It builds on, and complements, the IAIS’ Insurance Core Principles, standards and guidance, which were updated in October 2011 and are applicable to all insurers and insurance groups, unless otherwise specified.

“In our increasingly globally interconnected financial marketplace, supervisors need the ability to efficiently coordinate and cooperate across multiple borders”, said Peter Braumüller, Chair of the IAIS Executive Committee. “ComFrame will provide the foundation needed to effectively work together in supervising complex cross-border insurance groups and, in addition to contributing to global financial stability, will help protect the individual policyholder.”

ComFrame was initiated in response to the recognition that, despite the growing relevance of IAIGs in the global insurance marketplace, no internationally coherent framework exists for the supervision of such large, global groups beyond the Insurance Core Principles, standards and guidance. It contains qualitative and quantitative requirements for IAIGs, as well as requirements for supervisors intended to foster greater cooperation and coordination among supervisors.

The four main benefits of ComFrame – the “four Cs” – are:

1. Customisation of supervisory requirements and processes. IAIGs are the largest, most complex insurance entities and, as such, require customised supervisory requirements and supervisory processes.
2. Convergence fostering. ComFrame is designed to create more commonality and comparability among supervisory approaches without being rules-based, with the aim of achieving as much consistency as possible.
3. Complexity reduction. ComFrame will coordinate supervisory activities and information about IAIGs at the group-wide level and between group-wide and host supervisors, thereby reducing duplication of supervisory efforts and consequently reducing demands on IAIGs.
4. Coordination and cooperation enhancements. Supervision is more effective when supervisors work together to understand how IAIGs operate and how they can most efficiently be supervised. ComFrame will result in streamlining of supervisory processes and reduce multiple uncoordinated regulatory processes for IAIGs.

Press release

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