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IAIS responds to regulatory gaps with guidance on treatment of non-regulated entities

The International Association of Insurance Supervisors (IAIS) today published the Guidance paper on treatment of non-regulated entities in group-wide supervision to support insurance supervisors worldwide to address some of the key regulatory gaps as observed from the global financial crisis and to minimise regulatory arbitrage opportunities.

The guidance paper provides eight key features of group-wide supervision. These features call for appropriate consideration of the complexity of group structures and the full spectrum of risks posed by non-regulated entities through measures such as capital adequacy and governance requirements.

The release of the guidance paper is timely in responding to the recommendation by the G20, the Financial Stability Board and the Joint Forum which called for standard setting bodies to review the scope of financial regulation and address any gaps.

Peter Braumüller, Chairman of the IAIS Executive Committee, said “this guidance paper further supports the broader aim of the IAIS to enhance group-wide supervision globally and will support the development of a Common Framework for the Supervision of Internationally Active Insurance Groups.”

He added that “this was the first time the IAIS has used the newly introduced approach to adopt a supervisory paper in a fast-track manner to allow the necessary flexibility for the IAIS to address emerging issues in a timely manner.”

The guidance paper is available on the IAIS website at www.iaisweb.org.

IAIS Press release - 12 April 2010

About the IAIS

Established in 1994, the IAIS represents insurance regulators and supervisors of some 190 jurisdictions in nearly 140 countries and has also more than 120 insurance professionals, insurers, reinsurers and trade associations as observers. The IAIS issues global insurance principles, standards and guidance papers, provides training and support on issues related to insurance supervision, and organises meetings and seminars for insurance supervisors. The IAIS works closely with other international institutions to promote financial stability.

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