IAIS Global Seminar ComFrame: Update on Qualitative and Quantitative Standards Annick Teubner, Chair of the Governance Working Group (GWG) Old Windsor, 29 June 2017

ComFrame material integrated with ICPs 5, 7 and 8 Revised ComFrame material significantly shorter Overlaps with ICPs removed; Term ‘insurer’ in revised ICPs also include insurance groups; Some field testing outcomes already addressed in revision of ICPs in 2015. Reasons for revisions: Changes in style and structure resulting from the integration exercise; Address overall outcome of qualitative field testing exercise and accommodate specific comments made by field testing participants; The revised ICPs 5, 7 and 8 (November 2015); The need to improve clarity and consistency of language and terminology; and To reflect other international standards, such as principles of the Joint Forum regarding risk management and internal controls. Some specific comments made by field testing participants already addressed in revised ICPs

High-level summary of the comments received Lots of comments on ICPs rather than ComFrame Differentation of ComFrame from ICPs Requests for clarification or change: Different governance structures Proportionality and materiality Frequency (annual vs regular) Control functions Level of application of requirements Lots of comments on ICPs rather than ComFrame We received a lot of comments on ICPs themselves rather than on ComFrame material, in particular for ICP 5. We would like to remind that ICPs 5, 7 and 8 were published only as a background to ComFrame material integrated with those ICPs, and not for comments. Requests for clarification A lot of comments requested clarification of some parts of the text, or showed that ComFrame material was sometimes misunderstood. Some of those issues will be clarified by amending the ComFrame text, but we feel that sometimes it will be enough to provide an explanation in the resolution of comments, which will be published. As Ryan mentioned, it seems also necessary to clarify in general how ComFrame is constructed and how it should eb read and interpreted. Centralised vs. decentralized approach According to some comments ComFrame is designed for centralized rather for decentralized approach. ComFrame is meant not to favor any of the approach, as long as it allows to observe the requirements included in the ComFrame standards. The same applies to different types of insurers, such as mutual, joint-stock companies, etc. Proportionality and materiality – to be addressed in Ryan’s slides? According to the comments, ComFrame should reflect more proportionality principle. Materiality was also mentioned quite often. Sometimes those two concept were being confused. Just to mention than in case of ComFrame, proportionality can only mean raising the bar in case of some groups, not the level of requirements cannot be lower than the level set out in ComFrame. As Ryan mentioned (?), we will address this issue in a coordinated way for the entire ComFrame. We will also think how to address in a reasonable way the issue of materiality. According to some comments CoMFrame should not differentiate from ICPs ComFrame is built on ICPs, but the purpose of CoMFrame requires of course to provide for more stricter requirements. In this context I would like to remind the objectives of ComFrame, mentioned by Elise, which require in some cases stricter standards than those applicable under ICPs to all groups. Frequency (annual vs regular) There were many comments of the requirement for certain activities to be carried out on an annual basis. Again, I would like to refer to the objective and purpose of ComFrame. Control functions Some comments suggest that there is a misunderstanding about the role of the group control functions at the level of the Head of the IAIG We will think how to clarify this issue. Level of application of requirements In many cases there was a misunderstanding what was meant by standard saying that the group-wide supervisor should address some requirements towards the Head of the IAIG. It does not mean that group-wide supervisor should interfere in competences of the local supervisors responsible for supervising legal entities being part of the IAIG, or that the Head of the IAIG should manage those entities instead of their board. Those requirements are aimed at ensuring that the IAIGs is being supervised by the group-wide supervisors and managed b ythe IAIG Boards in a comprehensive way as a whole group.