FSB Designates G-SIIs and Releases Policy Measures for Enhanced G-SII Supervision

26 July 2013
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Key Takeaways:

  • On July 18, 2013, the Financial Stability Board (FSB) released its initial list of nine global systemically important insurers (G-SIIs) and the policy measures that will apply to them as implemented by their national authorities. Simultaneously, the International Association of Insurance Supervisors (IAIS) released its G-SII initial assessment methodology paper, as well as a more detailed document describing the G-SII policy measures.
  • The FSB’s release states that by the end of 2013 the FSB will agree with the IAIS on a timeline to finalize a comprehensive, group-wide supervisory and regulatory framework for internationally active insurance groups (IAIGs), including a quantitative capital standard, extending the importance of the FSB’s announcement to international insurers beyond those designated as G-SIIs.
  • The new measures rely on the same three recommendations as an earlier IAIS proposal: enhanced supervision, effective resolution, and higher loss absorption (HLA) capacity, but add an important fourth measure, loss absorption (LA) capacity.
  • The FSB deferred until July 2014 any decision on G-SII designation of reinsurers.