IAIS, SIF set out key advisory

The International Association of Insurance Supervisors (IAIS) in partnership with the United Nations–convenedSustainable Insurance Forum (SIF) published recently an application paper on the supervision of cimate-related risks in the insurance sector. The Paper provides insurance supervisors with concrete tools to further strengthen their efforts in assessing and addressing risks to the insurance sector from climate change. It also sets out recommendations and examples of good practice, consistent with the Insurance Core Principles (ICPs). With this publication, the IAIS and SIF aim to promote a globally consistent approach to the supervision of climate-related risks.

“Climate change poses a material and present risk to the insurance sector,” said Vicky Saporta, IAIS executive committee chair. “The IAIS recognises that failure to adequately manage the impact from climate change across the financial sector could put both global financial stability and policyholders at risk. This joint IAIS/SIF Application Paper will support supervisors in their efforts to address climate change and other sustainability challenges.”

Anna Sweeney, Chair of the SIF, commented: “The IAIS and SIF developed an innovative partnership to increase supervisory attention on the risks posed by climate change. This Application Paper provides an invaluable resource for supervisors and will support the SIF’s ongoing efforts to build supervisory capacity in this area.”

Highlights of the recommendations include role of supervisors, corporate governance, risk management, investment policy and disclosures.