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IAIS Introduces New Assessment Methodology for G SIIs and Discontinues NTNI Label
21 June 2016
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On 16 June 2016, the International Association of Insurance Supervisors (“IAIS”) released its updated assessment methodology for the designation of global systemically important insurers (“G-SIIs”).
The revised methodology expands the designation process to five phases, including qualitative and quantitative analysis.
Responding to comments from the industry, the revised methodology adopts absolute reference values for certain indicators, namely derivatives trading, financial guarantees and reinsurance.
On 16 June, the IAIS also published a paper on insurance product features that increase an insurer’s potential to pose systemic risk, and discontinued the non-traditional, non-insurance product label.
The changes bring the G-SII designation process more closely in line with the U.S. process for designating non-bank systemically important financial institutions.
Ongoing changes to the assessment methodology create a level of uncertainty for large, global insurers and the strategic decisions they take now could have unintended consequences in the future.
Alexander R. Cochran
E. Drew Dutton
Thomas M. Kelly
Gregory J. Lyons
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