The FSB have today announced their initial list of G-SIIs, which saw Allianz join AIG on the insurer list. Companies which were today listed included China's Ping An Insurance Group as well as:
In the US:
- AIG Group
- Metlife Inc
- Prudential Financial
In Europe:
- Allianz SE
- Assicurazioni Generali SpA
- AXA SA
- Aviva Plc
- Prudential Plc
For the institutions identified today, implementation of enhanced group-wide supervision commences immediately, crisis management groups should be established by July 2014, and the recovery and resolution planning requirements under the FSB Key Attributes for Effective Resolution Regimes should be met by end-2014. As a foundation for higher loss absorbency requirements for G-SIIs, the IAIS will as a first step develop straightforward, backstop capital requirements to apply to all group activities, including non-insurance subsidiaries, to be finalised by the time of G20 Summit in 2014. Implementation details for higher loss absorbency requirements will be developed by end-2015 and will apply starting from January 2019 to those G-SIIs identified in November 2017.
Mark Carney, Chairman of the FSB said “Today marks an important step toward more broadly addressing the risks associated with systemically important financial institutions. These policy measures will be followed over time by a substantially strengthened comprehensive regulatory and supervisory framework for all internationally active insurers. A sound capital and supervisory framework for the insurance sector is essential for supporting financial stability.”
Jim Bichard, partner in PwC's insurance team, commented on today's annoucment by saying:
"Following the development of a SIFI concept, the FSB have been working on the application of a suitable approach for the insurance sector. Whilst the debate around whether an insurer is systemically important is still contested, the release of this list represents the first step in a process which will potentially culminate in additional levels of regulatory capital being held.
"The FSB has set the tone with its initial focus on G-SIBs and the development of stringent measures for this group, and we are now seeing similar frameworks being introduced into the insurance world. The work of the IAIS is critical in ensuring an appropriate measure is developed for this unique market, as opposed to a simple copy from the banking framework. In addition, the work of the IAIS developing a global capital standard will play a significant role in achieving a consistent international approach.
"From our perspective, banks have invested significantly, reflecting the level of effort and work required to address some of the new systemic policy measures, such as recovery plans. Some of the insurers on this list have already developed their own responses to these measures and it is this kind of early preparation which will help them in the long run.
"Whilst the list contains 9 insurers who are deemed globally important, we expect that other internationally active insurers will follow these developments closely as regional and domestic policy makers are already developing standards for their domestic markets . Furthermore, the IAIS continues to develop its own common framework for international active insurance groups."
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