Second Asia-Pacific high-level meeting on insurance supervision
Macao SAR, 24 May 2019
Senior insurance supervisors from Asia-Pacific, the fastest growing insurance market in the world, met to discuss three key issues - technology, climate change and proportionate regulation.
This was the second meeting of its kind, bringing together over 50 senior officials from insurance authorities and companies. The meeting was hosted by the Monetary Authority of Macao, and was jointly organised by the Asian Forum of Insurance Regulators (AFIR), the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) and the International Association of Insurance Supervisors (IAIS).
I strongly believe that we have gained valuable takeaways from the meeting. Moving forward, we will need to stay vigilant on upcoming supervisory concerns, learn from other supervisors in the region and adjust our local legislative standards to meet the new era of insurance.
Siddharth Tiwari, the BIS's Chief Representative for Asia and the Pacific, delivered a special address based on the report Making the Global Financial System Work For All published by the G20 eminent persons group on global financial governance.
The IAIS will remain forward-looking and will proactively support our Members in fast-growing regions such as this one in facilitating and harnessing innovation for market development, while still protecting policyholders and contributing to global financial stability.
As the global frontrunner in embracing technological developments both in the provision of insurance services and the use of technology by insurance authorities themselves, the insurance industry in Asia-Pacific has the potential to revolutionise the insurance sector and the way supervision is conducted. In this regard, the meeting exchanged views on fintech sandboxes, technology used for supervision (suptech) and importantly, cyber security resilience frameworks.
The devastating human and economic impact of climate change on increasingly urbanised populations in this region is clear. The time has come to go beyond raising awareness of risks arising from climate change. Supervisors in the region and indeed globally are taking concrete actions to address climate change risks, in close partnership with the insurance industry. The meeting noted concrete regulatory and supervisory measures that have been taken in two major jurisdictions in tackling these critically important risks.
The meeting also discussed the different regulatory approaches in applying proportionate insurance solvency requirements. With the forthcoming finalisation of the global Insurance Capital Standard (ICS) by the IAIS, there could be further consideration in providing guidance on the proportionate application of such a standard.
The risks and opportunities presented by rapid technological developments, and the ways in which climate change manifests itself in financial terms must be fully grasped by the global supervisory community. To this end, the FSI will incorporate the outcomes of the incredibly rich discussion at this meeting into its work programme.