This challenging business and economic environment has instilled a heightened sense of urgency among insurance regulators, such as the International Association of Insurance Supervisors. The IAIS’s review of Insurance Core Principles, or ICPs, a global regulatory framework of best practices, pressures insurers to address a number of issues:
- Group Supervision: Insurers must fully understand how the core principles will affect their operations.
- Current Assumptions: This change will involve more frequent experience analyses.
- ERM: Insurers should perform an internal gap analysis to identify how their risk processes currently work so they can address any shortcomings.
- Regulatory Convergence: Small to midsize firms, in particular, need to engage with industry bodies at a sufficiently early stage of the ICPs’ implementation to raise awareness of their circumstances and positions.
- Financial and Regulatory Reporting: Insurers will need to implement appropriate programs and disclosures to address the impact of any reporting divergence that may pose practical and communication challenges with stakeholders.