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The Actuary The magazine of the Institute & Faculty of Actuaries

ABI promotes risk-based supervision

The Association of British Insurers (ABI) has joined other global insurance supervisors to launch new principles to protect policyholders and ensure enhanced risk-based supervision. They agreed that, overall, the insurance industry entered the crisis in a strong position and had shown resilience to the continuing shocks to the financial system.

According to the ABI the resilience seen to date reflects the strength of the insurance business model and the increasing attention paid by insurance regulators to fostering risk-based supervision. After meeting with the International Association of Insurance Supervisors the ABI reports that the global insurance industry believes that insurance regulation should continue to be based on key principles:
> The insurance industry shares the regulators’ objective of protecting policyholders
> International insurance companies should be regulated with enhanced co-operation among supervisors and group-wide supervision
> Supervisory authorities should strengthen their ability to cooperate in identifying emerging problems and in using their existing powers in an efficient and appropriate way, to safeguard policyholders and beneficiaries.
> The insurance industry encourages the continuing trend towards risk-sensitive regulation. The level of prudential requirements should reflect the level of risk and diversification.
> The insurance industry believes that regulation should encourage competition.

Further information can be found at www.abi.org.uk