Financial Services Commission 1

International Insurance Regulation

Michael Oliver

Director of Insurance

Financial Services Commission

British Virgin Islands

Financial Services Commission 2

International Regulatory Bodies

• International Association of Insurance Supervisors (IAIS)

• Offshore Group of Insurance Supervisors (OGIS)

Financial Services Commission 3

IAIS

• Established in 1994

• First supervisory principles – 1997

• Began work with IMF on FSAPs – 1999

• Core Principles (17) established in 2000

• Revised Core Principles (28) in 2003

• 180 member jurisdictions

• Observers allowed since 1999 – Now 100

Financial Services Commission 4

Role of IAIS

• Aim – Promotion of Financial Stability

• International Regulatory Setting Body

• Issues Principles, Standards and Guidance

• Promotes International Cooperation

• Liaises with other financial sector standard setting bodies

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IAIS Structure

• About 20 IAIS Committees and Subcommittees

• BVI is a member of two subcommittees:• Insurance Fraud Subcommittee drafts

papers on prevention of insurance fraud & guidance on AML/CFT

• Regional Coordinators – Coordinates for Offshore and Caribbean regional regulatory training & provision of technical assistance

Financial Services Commission 6

OGIS

• Established in 1993• 14 Members• 6 Observers (All Regulators)• Objectives:

• Promote the proper supervision of offshore insurance business

• Formulate regulatory policies for offshore insurance business

• Assist non members to establish appropriate supervisory regimes

• Represent OGIS at international fora

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OGIS

• BVI Chairman of:

• Evaluation Committee – Assesses compliance of members/observers and new applicants with insurance core principles

• Education Committee – Organises and implements annual training programme

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IAIS Insurance Core Principles

• ICP 1 – Conditions for Effective Insurance Supervision – Institutional and Legal Framework

• ICPs 2 to 5 – The Supervisory System – Powers and Conduct of the Supervisory Authority

• ICPs 6 to 10 – The Supervised Entity – Licencing and Governance of the Insurer

• ICPs 11 to 17 – On-going Supervision – Monitoring, Inspections, Enforcement Action and Winding Up.

• ICPs 18 to 23 – Prudential Requirements – Risk Assessment and Capital Adequacy

• ICPs 24 to 27 – Markets and Consumers – Intermediaries, Consumer Protection and Disclosure

• ICP 28 – Anti-Money Laundering and Combating the Financing of Terrorism

Financial Services Commission 9

IAIS Current Activities

• International Financial Reporting Standards – Working with IASB.

• Solvency – Common methodology for assessing insurer solvency. Focus on:

• Risk management• Insurer governance

• Reinsurance

• Finite Reinsurance• Mutual Recognition• Reinsurance transparency

• Multi-Lateral Memorandum of Understanding

Financial Services Commission 10

OGIS Current Activities

• Captive Issues Paper

• Demystifying captives

• Why might regulatory touch differ?

Financial Services Commission 11

International Insurance Regulation

Michael Oliver

Director of Insurance

Financial Services Commission

British Virgin Islands