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Governance Of International Association Of Insurance Supervisors (IAIS)

Governance Of International Association Of Insurance Supervisors (IAIS)

The IAIS constituency is split into members and observers. Members of the Association are in principle, insurance industry regulators and supervisors. Additionally the By-laws allow specifically for the membership of the NAIC, the U.S. Federal Insurance Office and the international organisations made up of governments or statutory bodies which receive recommendation for membership from the Executive Committee.

At the end of 2011, the list of these organisations included the IMF, The World Bank, the OECD and the European Commission. Altogether at the end of 2011, the membership of the Association comprised insurance regulatory and supervisory authorities representing 190 jurisdictions from about 130 countries, 57 of them representing the U.S. Furthermore, since 2011 it also includes the European Insurance and Occupational Pensions Authority (EIOPA).

It effectively covers around 97 per cent of the global insurance market which means that its legitimacy to represent the global insurance supervisory community is extremely high. Since 1999, members of the IAIS are supplemented by observers who accounted, at the end of 2011, for 120 institutions. They also include a number of international bodies such as the Association of Mutual Insurers and Insurance Cooperatives (AMICE), Insurance Europe (formerly CEA), Federación Interamericana de Empresas de Seguros (FIDES), Institute of International Finance (IIF), International Actuarial Association (IAA), World Federation of Insurance Intermediaries (WFII) and The Geneva Association.

Insurance
[Post Image Courtesy of PhasinPhoto at FreeDigitalPhotos.net]

Corporate governance of the IAIS is quite typical in its general set-up. Major authority is vested in the General Meeting of the members. It decides by a simple majority. A two-third majority is required only for the most important decisions. These include amendments of the By-laws, adoption of principles, standards and guidance and the dissolution of the Association (Article 12). The General Meeting is held every calendar year. Effective management of the Association is in the hands of the Executive Committee (ExCo), composed of 9-24 voting members and elected by the General Meeting. The ExCo elects from within its members a chair and a vice-chair. Geopolitical considerations and the perceived need for balanced geographical representation play an important role in allocating these seats to individual jurisdictions, as is the case for the chairs of the most prominent and influential committees.

The Executive Committee oversees the work of four other committees: the Technical Committee, responsible for standard setting; the Implementation Committee, responsible for standards implementation; the Budget Committee, overseeing the budgetary matters; and the Financial Stability Committee, concentrating on financial stability issues. This last committee was added to the structure in 2010 and reflects the growing role of the stability work and concerns within the Association in the aftermath of the financial crisis. Much of its work is currently driven by the FSB and the G-20 desire to identify potential systemically important financial institutions (SIFIs) in all parts of the financial sector, including insurance.

The work of the ExCo, specialised committees and working parties is assisted by the office staff (around 30 people) of the Secretariat, headed by the Secretary General and his two deputies. However many of the activities within the Association are performed by its member organisations, i.e. the supervisory authorities themselves. It allows the IAIS, on the one hand, to maintain low expenses and keep better pace with the national and international developments through bodies that are directly involved while, on the other hand, it privileges larger and richer bodies at the expense of the others, thus adding an element of internal asymmetry to the whole Association.

Insurance Law And Practice - ICSI

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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