The International Association of Insurance Supervisor (IAIS) has commended the Financial Stability Forum (FSF) on its report titled Enhancing Market and Institutional Resilience, which was recently presented to the G7 Finance Ministers and Central Bank Governors (report). The report analyses the causes and weaknesses that have produced recent turmoil in financial markets and set out recommendations for increasing the resilience of markets and institutions going forward. The report proposes concrete action in relation to five areas: strengthening prudential oversight of capital, liquidity and risk management; enhancing transparency and valuation; changing the role and uses of credit ratings; strengthening the authorities’ responsiveness to risks; and implementing robust arrangements for dealing with stresses in the financial system.

Work undertaken by the IAS suggests that the impact of the current financial market turmoil on the insurance sector appears to have been limited to date, and the insurance sector as a whole remains stable. The IAIS has also noted that there are uncertainties over the extent and development of the market turmoil, and is co-ordinating work undertaken in a variety of areas, such as risk management, valuation, accounting and risk disclosure, and will take into the findings of the report into account with this work.