GIS Conference 2014
3rd Conference on Global Insurance Supervision
Fit for Global Thinking?
9-10 September 2014
Goethe University, Frankfurt, Germany
Top representatives from major (re)insurance groups, regulators and supervisors from around the globe and renowned academics met to debate the hot spots of international insurance supervision, focusing on global trends in risk-based supervision and the upcoming challenges in the implementation of global standards. Participants are invited to also discuss the regulatory aspects of doing business in emerging markets and the challenges supervision is facing nowadays, in which the consumer’s voice plays a crucial role.
For the first time, the organisers of the 3rd international conference, the International Center for Insurance Regulation (ICIR) and the European Insurance and Occupational Pensions Authority (EIOPA), welcome on board two new partners: The World Bank and the Center for the Study of Insurance Regulation (CSIR) of the School of Risk Management, St. John’s University (New York), to further promote the conference’s global setting.
The event took place in the Goethe University Frankfurt and attracted around 140 participants. The GIS Conference 2014 was sub-titled “Fit for global thinking?” and its speakers and participants were encouraged to reflect on the creation of a global insurance regulatory framework.
The first day, 9 September, focused on three topics:
1) The impact of the low interest rate environment on insurance
The speakers indicated that the long lasting low interest rate environment resulted in the insurance business becoming unstable and conservative. It was indicated that in case low rates continue for longer time (a so-called “Japanese scenario”), more insurance companies will be exposed to insolvency.
2) Global trends in risk-based supervision
This issue was discussed from both regulatory and industry prospective. It was indicated that there is a world-wide trend to move towards risk-based approaches and international harmonisation.
From the regulatory side, speakers presented examples of jurisdictions as Argentina, Brazil, China, Jordan, the EU, Mexico, Singapore, Thailand, Turkey, the USA, where necessary changes in different supervisory pillars have been made. Some participants called for strengthening group supervision. Regulators also pointed at the number of challenges such as the lack of data and the lack of the relevant training or knowledge.
From the industry side, speakers warned about the risks of overregulation and called for a simple and efficient supervision that aims to facilitate problems rather than to stop insurers from further developments.
3) Global standards: upcoming challenges in implementation
The topic was discussed in 4 sessions dedicated to the impact on existing regulatory frameworks; challenges for the industry in bridging the gap in order to comply with global standards; the ways of how global standards can cope with emerging risks as well as the necessity to ensure consistent application of global standards in the long-run.
The second day, 10 September, was dedicated to two issues:
1) Consumer protection as a new supervisory focus
It was emphasized that consumer protection has become part of the international agenda for insurance regulation and different countries have similar priorities with regard to this issue. Panellists spoke about the need to achieve higher transparency of insurance industry and intermediaries; the supervisors’ duty to confront industry actions that are to the detriment of consumers and the importance of having in place the product oversight rules.
At the same time some participants emphasized that industry should see it as its duty to deliver high level services and protection to people; in particular, tohelp them to make informed decisions by effectively describing the products and presenting “such documents that consumers will understand”.
2) Doing business in emerging markets: regulatory developments
Panellists discussed possible steps that regulators can make in order to improve the penetration of insurance companies on the emerging markets. It was noted that companies entering such markets need to properly identify risks they will or might be facing and provide the right coverage for them. At the same time supervisory authorities in such countries were advised to always orient towards already existing good practices, to engage in dialogue with new comers, to observe the proportionality principle and to bear in mind the costs of regulation.
(1) The Impact of the Interest Rate Environment on Insurance
Prof. Jean W. Kwon, St. John's University NY
(2) The Impact of the Interest Rate Environment on Insurance
Prof. Helmut Gründl, ICIR, Goethe University
(3) Global Trends in risk-based Supervision - Regulatory View
Nick Gerhart, Insurance Commissioner, Iowa
(4) Global Trends in risk-based Supervision - Regulatory View
Manuel Aguilera, Presdient, ASSAL/CNSF
(5) Global Trends in risk-based Supervision - Industry View
Paul Mattera, Senior Vice President & Chief Public Affairs Officer, Liberty Mutual Group
(6) Global Trends in risk-based Supervision - Industry View
Esteban Tejera, First Vice-Chairman and General Manager, MAPFRE SA
(7) Global Trends in risk-based Supervision - Regulatory View
Michel Noel, Practice Manager, Non-Bank Financial Institutions
Finance & Markets Global Practice, The World Bank