Investor Presentaiton
If a licensee is considering requesting a derogation from the additional disclosures under FRS
103, and has reviewed the Guidance on the Commission's website, they can discuss this with
the Commission, normally via the insurance manager.
Also, if a derogation under the IBL is agreed and an audit is to be waived under the Companies
Law, please ensure you speak to your auditor.
Slide 16: Look ahead to 2015
Looking ahead to 2015 as well as continuing business as usual of supervision under PRISM the
key continuing initiatives will be:
•
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the revision of laws project within which we will ensure that our IAIS Core Principles
gap analysis is linked,
Implementation of the risk based solvency regime
training for ourselves and industry ion using and interpreting the results of the risk
based solvency regime,
Some insurers preparing financial statements on a properly prepared basis not true and
fair.
Slide 17: Probability Risk and Impact SysteM - PRISM
We mentioned at the last industry presentation that the Commission would be switching to a
new impact and risk-based supervisory framework in 2014. This framework is called PRISM,
the Probability Risk and Impact System, and Insurance were the first regulatory division to
adopt PRISM in late 2013.
Risk based supervision starts with the premise that not all firms are equally important to the
economy and that a regulator can deliver most value through focusing its energies and finite
resources on the firms that are most significant and on the risks that pose the greatest threat to
financial stability and consumers.
Our first step therefore has been to classify all of our firms into four categories of impact.
High, medium High, Medium Low and Low. Impact indicates the degree of damage a firm
could cause to the financial system, economy and population were it to fail or to engage in
persistently poor conduct.
Our subsequent engagement with a firm is driven by its impact level, so those classified as high
impact can expect to see the Commission more regularly than before and with a greater focus
on detail.
Conversely, those firms classified as low impact will not usually see the
Commission unless there has been an adverse event.
A large percentage of international insurers are, as one would expect, classified as low impact
but there a number of high, medium high and medium low impact insurers.. The cycle of
engagement for these insurers is lengthier than you are currently used to covering areas such as
business model analysis, Governance reviews, financial risk reviews and in-depth discussions
with senior management and directors.View entire presentation