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Member, Beacon International Group, Ltd.
BASEL, Switzerland—The International Assn. of Insurance Supervisors said it plans to issue guidance on insurance securitization and make recommendations on common standards for supervising risk transfer to the capital markets by 2011.
In a report issued this week, the Basel, Switzerland-based IAIS, which represents the insurance regulators and supervisors of 190 jurisdictions, said it has identified insurance securitization as a key concern related to the insurance industry’s financial stability and transparency.
The organization said regulatory developments addressing insurance securitization so far have followed national policies, “resulting in a variety of dissimilar approaches.” However, due to the markets’ growth and global implications, greater consistency in supervising securitized risk is necessary, the report said.
In addition, the IAIS said supervisors “face challenges” in understanding some of the unique features of insurance-linked-securities-type transactions; and the role of supervision is complex due to the number of parties and jurisdictions typically involved.
The report “Developments in (Re)insurance Securitization” can be accessed at www.iaisweb.org.