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ICP 24 consultation: timing of review questioned

Insurance Europe has responded to the International Association of Insurance Supervisors’ (IAIS) consultation on revisions to Insurance Core Principle (ICP) 24 on macroprudential surveillance and insurance supervision.

Insurance Europe strongly urged the IAIS to postpone the review of ICP 24 until after the conclusion of the work of the Systemic Risk Assessment Task Force on developing an activities-based approach.

Insurance Europe emphasised that traditional insurance is not systemically risky. It said that systemic risk from individual insurers can only originate from a very limited number of activities undertaken on a large scale in the wrong conditions.

Insurance Europe supported the explicit inclusion of plausibility as a factor for stress test scenarios, but urged that stress testing exercises should not be understood as pass-fail exercise linked to capital adequacy.

Insurance Europe expressed doubts that the proposed relative rankings as a result of horizontal reviews would be an efficient measure for macroprudential surveillance and asked for its removal.

Published 2 October 2017