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FSB list
At its 3-4 December Plenary meeting, the Financial Stability Board (FSB) agreed to publish the first iteration of a list of insurers reported by their respective supervisors[1] as being subject to resolution planning and resolvability assessment requirements consistent with the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) – specifically Key Attributes 8-11.[2]
An insurer is not considered systemically important by virtue of being included in the list of reported insurers. The list differs in several material respects from the discontinued list of global systemically important insurers (G-SIIs) published by the FSB until 2016.
The list only includes insurers that are subject to each of the Key Attributes 8-11, and as such does not include (i) insurers subject only to recovery planning but not resolution planning and resolvability assessment requirements; (ii) insurers which have no or only limited international activities; or (iii) insurers that are headquartered in a jurisdiction that is not represented in the FSB Plenary. Furthermore, an insurer may be prepared to address significant distress or failure even though not reported to the list.
The published list informs market participants that insurers and their supervisors are better prepared to address the significant stress or failure of an insurer, including that relevant authorities are prepared to work together across borders. The list also provides reassurance on the consistent application of resolution standards across the globe.
The IAIS and the FSB have been closely coordinating on the FSB’s resolvability monitoring and annual public reporting on the insurance sector and will continue to do so.
IAIS Holistic Framework
The publication of the list of reported insurers follows the 2022 decision to endorse the IAIS Holistic Framework for the assessment and mitigation of systemic risk in the insurance sector (Holistic Framework) and to discontinue the annual identification of G-SIIs.[3] Instead, the FSB utilises the assessments available through the Holistic Framework to inform its considerations of systemic risk in the insurance sector. The IAIS conducts its risk assessment through the annual Global Monitoring Exercise (GME) and collective discussion and reports the outcomes to the FSB on an annual basis.
The IAIS also undertakes a robust assessment of the comprehensive and consistent implementation of the Holistic Framework related supervisory material, which has included 16 major insurance market jurisdictions, comprising around two-thirds of the FSB membership.
Based on the results of these assessments, including identified gaps, the IAIS initiated a review of certain related standards focused on clarity of interpretation or correction of unintended consequences. Proposed revisions underwent public consultation between March and June 2024. The revised standards were adopted by the IAIS Annual General Meeting on 5 December in Cape Town, South Africa. With these revisions, there is greater alignment between the FSB and the IAIS standards, thereby further supporting globally consistent supervisory approaches. Notably, the scope of application of recovery and resolution planning requirements are now aligned, with both the FSB and IAIS standards applicable, at a minimum, to any insurer(s) assessed to be systemically important or critical if it fails.