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Response to IAIS consultation on revisions to ICP 15 and 16 published

Insurance Europe has responded to the International Association of Insurance Supervisors’ (IAIS) consultation on revisions to Insurance Core Principles (ICP) 15 (Investment) and 16 (Enterprise Risk Management for Solvency Purposes).

Insurance Europe said that the principle of “freedom of investment” should be incorporated in ICP 15, with the understanding that no limits on either investment assets or jurisdictions, nor any obligations to invest in specific assets or jurisdictions are appropriate. Prudential concerns on investment risks should instead be addressed via appropriate and balanced qualitative and quantitative measures, which should have as their key objective the correct identification and measurement of the actual risks that insurers are exposed to when investing.

Insurance Europe noted the significant overlap between ICP 8 and 16, which leads to numerous duplications and inconsistencies. To avoid such duplications, Insurance Europe suggested that ICPs 8, 16 and the relevant parts of ComFrame should be merged. In addition, a large part of the guidance in ICP 16 is too granular and prevents the proportional implementation of an adequate risk management system. Insurance Europe warned that, in fact, the granularity of ICP 16 endangers the principle-based approach of the framework.

Published 7 February 2018