International Insurance Supervisors Group Assessing COVID-19 Impact

The International Association of Insurance Supervisors (IAIS) Executive Committee is taking steps to assess the COVID-19 pandemic's impact on the insurance sector and the organization's activities.

"The rapid global spread of COVID-19 and the steps taken to limit contagion are having a significant impact on the global economy and, consequently, on the financial system," the IAIS said. "Insurers are exposed on both sides of their balance sheets; on the liability side because of changes to interest rates as well as the potential increase in claims and on the asset side due to market volatility."

Insurers are generally well capitalized and have sophisticated risk management capabilities, which should help the sector withstand shocks associated with COVID-19, the IAIS said.

The organization noted that IAIS members are pursuing a range of regulatory and supervisory measures to provide operational relief to insurers as they deal with the pandemic and to provide appropriate flexibility to help insurers maintain their safety and soundness and deliver the essential services they provide to policyholders and the economy.

Additionally, the IAIS said it will use the framework it's developed in recent years for forward-looking risk assessment to conduct a targeted assessment of the impact of COVID-19 on the global insurance sector.

In consultation with the Financial Stability Board, the IAIS will review the 2020 timelines for the implementation of the Holistic Framework for the mitigation of systemic risk in the global insurance sector. And the IAIS is reviewing and adjusting data collection timelines for the Insurance Capital Standard confidential reporting in 2020, as well as the Aggregation Method data collection being supported by the IAIS.

The IAIS also will replace in-person working group meetings with conference calls through September and has canceled its June committee meetings and Global Seminar, which had been scheduled for September. The in-person committee meetings will be replaced with conference calls, while the IAIS is exploring virtual means of engaging stakeholders in the absence of the Global Seminar.