GFIA and Insurance Europe commented on the Financial Stability Board's consultation, 'Principles for an effective risk appetite framework'.
The GFIA stresses that the paper should take greater account of the diversity of insurance business models and should include statements on proportionality and confidentiality in the treatment of sensitive information. It also points out that the principles should avoid being overly prescriptive and should instead focus on outcomes.
Development of the FSB principles was one of the recommendations to come out of the FSB’s peer review on risk governance, which was published in February 2013.
In the context of the discussions on systemically important financial institutions, and otherwise, Insurance Europe has consistently highlighted the importance of firms maintaining robust risk management, strong governance, sound internal control mechanisms and adequate risk disclosure practices. The implementation of an effective risk appetite framework (RAF) by both financial institutions and supervisors is essential to ensure the right foundation is provided to support this and that it is fully embedded in a firms risk culture.
Insurance Europe position paper
© FSB - Financial Stability Board
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