The International Association of Insurance Supervisors (IAIS) has announced the adoption of the revised IAIS Insurance Core Principles, Standards, Guidance and Assessment Methodology (Core Principles). The Core Principles constitute the globally-accepted framework that the World Bank and International Monetary use to evaluate supervisory regimes under the Financial sector Assessment Program, conducted by the International Monetary Fund and World Bank (FSAP).

The revised ICPs are based on developments in insurance markets and supervision since the last version of the Core Principles were introduced in 2003, and draw upon experience gained through the FSAP assessments, and recommendations issued by the G20 Finance Ministers and Central Bank Governors and the Financial Stability Board.

Two features of the Core Principles are particularly important. First, the Core Principles contain a new focus on macro-prudential surveillance of insurers, which reflects the growing international regulatory emphasis on global financial instability. Second, the Core Principles are organised according to a new hierarchy of supervisory material. At the highest level, reflecting the greatest importance, are ‘statements’, which outline the essential elements that must be present in a supervisory regime in order to promote a financially sound insurance sector. Next comes ‘standards’, which set out key high level requirements that are fundamental in implementing the Core Principles. The lowest priority is ‘guidance’, which elaborates on the meaning of standards and provides examples of ways to comply with or implement them.