Finance

Finance

Azerbaijan took part in 16th IAIS Annual Conference in Rio de Janeiro

28 October 2009 09:24 (UTC +04:00)

Baku. Elnur Huseynguluyev â€“ APA-Economics. Zeka Mirzeyev, financial and insurance market supervisor at the Ministry of Finance of Azerbaijan, attended the 16th Annual Conference of the International Association of Insurance Supervisors (IAIS) on 21-24 October 2009, in Rio de Janeiro, Brazil.

The conferees included both insurance supervisors and insurance industry professionals from around the world.

The theme of this yearâ€™s conference was Insurance as a means of socioeconomic development -financial crisis and the future of insurance markets.

Panel discussions at the conference included: â€œInsurance as a means of socioeconomic developmentâ€; â€œLessons from the crisis â€“ for supervisors and the insurance industryâ€; â€œA new international supervisory architectureâ€; â€œPromoting sound insurance marketsâ€; â€œFinancial literacy and consumer protectionâ€; â€œGlobal developments in solvency regulation and supervisionâ€; â€œCorporate governance and risk managementâ€; and, â€œCo-operation among supervisorsâ€.
The panel discussions and informal interactions among supervisors and industry professionals during the conference provided the opportunity to explore the challenges facing the insurance industry and to identify how best to reinforce supervisory systems worldwide.

The panel discussed financial inclusion and the need to support access to insurance by promoting successful regulatory, supervisory and policy approaches. Availability of insurance to low income populations reduces their vulnerability against risks such as unemployment, illness, death of a family member, theft, traffic accidents and labor related accidents.

A number of important steps were taken during the annual conference, including:

- The launch of the Access to Insurance Initiative which is a new collaborative approach between international development agencies and insurance supervisors designed to strengthen the capacity and expertise of insurance supervisors and to facilitate their role in expanding access to insurance markets.
- The signing of three further insurance supervisory authorities to the IAIS Multilateral Memorandum of Understanding (MMoU). The MMoU facilitates cooperation and exchange of information between supervisors.
- The adoption of a guidance paper providing the key features for effective supervisory colleges in group-wide supervision.
- The extension of the Financial Stability Institute (FSI) on-line training tutorials to areas of specific interest to insurance supervisors, supported by the IAIS. Over the next few years, the FSI will introduce a number of additional insurance-focused tutorials.
- The adoption of a standard and guidance paper on the capital resources for solvency purposes to support the enhancement, improved transparency and comparability and convergence of insurer solvency internationally.

According to the discussions, the financial crisis has revealed that further improvements could be made in the area of group-wide supervision, investments, capital and liquidity requirements, crisis management and regulatory structure and process.

Some of the measures that could be considered include the development of: global converged standards; a solid basis for supervisory cooperation; and a global group-wide supervision framework. Other measures could include a renewed focus on investment management; improvement in the quality of capital; better investment and liquidity risk management; and enhanced preparedness for crisis management. Both micro- and macroprudential perspectives could be considered in these areas.

The panel concluded that it was important to continue pursuing global financial regulatory reform efforts despite recent signs of economic recovery as the global financial crisis may not have yet revealed its full impact.

The panelists discussed how the financial crisis had underscored the importance of improved cross-border supervisory cooperation and coordination as well as adequate consolidated group supervision that includes non-regulated entities. The need for well constructed prudential regulation at both solo and group level was particularly emphasized and the panelists remarked that effective equivalence assessment mechanisms were needed to ensure cross-border comparability and consistency. In his summary, the chair remarked that although there were differences in approaches and in the speed of reform, supervisors around the world shared common focal points and were trying to achieve similar outcomes. The IAIS can play a vital role in addressing supervisory gaps and ensuring better supervisory coordination.

Established in 1994, the IAIS represents insurance regulators and supervisors of some 190 jurisdictions in nearly 140 countries and has also more than 120 insurance professionals, insurers, reinsurers and trade associations as observers. The IAIS issues global insurance principles, standards and guidance papers, provides training and support on issues related to insurance supervision, and organises meetings and seminars for insurance supervisors. The IAIS works closely with other international institutions to promote financial stability.