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  • ABIR Comments on IAIS "Revised Insurance Core Principles 13 Reinsurance & Other Forms of Risk Transfer

    Int'l Regulatory | Statements / Letters | 08.01.2017

    July 30, 2017: ABIR filed the following comments on the IAIS Consultation “Revised Insurance Core Principles 13 Reinsurance and Other Forms of Risk Transfer”:

    Q1: General Comment on ICP 13: The Association of Bermuda Insurers and Reinsurers (ABIR) represents Bermuda’s major property and casualty insurers and reinsurers. We support the process of updating the Insurance Core Principles to currently reflect changes and issues which impact the supervision of reinsurance around the globe.

    Q2 Comment on Guidance ICP 13.0.1: It is important to note that many international groups will run a group programme of ceded reinsurance i.e. where business is ceded and limits are purchased for the group as a whole. Legal entities will in practice rely to a large extent on group efforts (form and content) of the ceded programme.

    Q3 Comment on Guidnce ICP 13.0.2: ABIR supports the recognition by the IAIS that geographical diversification of risk plays a key role in capital and risk management and the contribution this may also make to the financial stability of the jurisdiction by reducing concentration of risks. In this regard, we recommend that this important issue be further strengthened by adding language to 13.1.1 to the effect that “supervisors should be aware that measures that limit or restrict cedants´ ability to optimize risk spreading pose a risk to the ability to serve policyholders appropriately”.

    Q9 Comment on Guidance ICP 13.1.1: ABIR supports the recognition by the IAIS that geographical diversification of risk lays a key role in capital and risk management and the contribution this may also make to the financial stability of the jurisdiction by reducing concentration of risks. In this regard, we recommend that this important issue be further strengthened by adding language to 13.1.1 to the effect that “supervisors should be aware that measures that limit or restrict cedants´ ability to optimize risk spreading pose a risk to the ability to serve policyholders appropriately”.