THE ROLE OF MACROPRUDENTIAL POLICY IN THE INSURANCE SECTOR: EXPERIENCE DURING THE COVID-19 CRISIS

Jonathan Dixon

Financial Stability Review, 2021, 49-60

Abstract: The International Association of Insurance Supervisors (IAIS) has evolved its approach to assessing and mitigating systemic risk in the global insurance sector. This new approach is termed a “Holistic Framework”, recognising that systemic risk may not only arise from the distress or disorderly failure of individual insurers but also from the collective exposures of insurers at a sector-wide level. This article sets out this new approach, which consists of three reinforcing pillars: (i) macroprudential monitoring at a global level; (ii) the application of more stringent supervisory requirements to a broader portion of the insurance sector; and (iii) assessing the consistent implementation of those standards. During the Covid-19 pandemic, the Holistic Framework has already proven its value as it has allowed the IAIS to monitor the impact of Covid-19 on the global insurance sector through targeted data collections and has provided the necessary toolkit for insurance supervisors to take a coordinated approach to systemic events. Journal: Financial Stability Review

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:fisrev:2021:24:6

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