1. IAIS Standards Setting Activities and the Insurance Core Principles Washington – 4 May 2004 Luc Cardinal – Member of Secretariat International Association of Insurance Supervisors (IAIS) Website: www.iaisweb.org

2. IAIS standards setting activities and the Insurance Core Principles 2 Luc Cardinal 1.IAIS Principles Insurance Core Principles Supervision of international insurers Conduct of insurance business Insurance activities on the internet Capital adequacy and solvency Supervision of reinsurers

3. IAIS standards setting activities and the Insurance Core Principles 3 Luc Cardinal 2.IAIS Standards Licensing On-site supervision Derivatives Asset management Group coordination Exchange of information Evaluation of the reinsurance cover Supervision of reinsurers

4. IAIS standards setting activities and the Insurance Core Principles 4 Luc Cardinal 3.IAIS Guidance papers Supervision in emerging market economies Model memorandum of understanding for exchange of information Fit and proper principles and application Public disclosure by insurers Anti-money laundering and combating the financing of terrorism Solvency control levels Use of actuaries Stress testing Investment risk management

5. IAIS standards setting activities and the Insurance Core Principles 5 Luc Cardinal 4.IAIS Structure Secretariat Dialogue Group Secretariat Budget Committee Education Subcommittee Emerging Markets Committee Working Group on Observership & Membership Issues Insurance Laws, Regulations, Practices & Standards Subcommittee Task Force on Assessment & Implementation of ICPs Investments SubcommitteeFinancial Conglomerates Subcommittee Subcommittee on Enhanced DisclosureInsurance Fraud Subcommittee Solvency & Actuarial Issues Subcommittee Working Group on Electronic Commerce/Internet Task Force on Enhancing Transparency & Disclosure in the Reinsurance Sector Accounting Subcommittee Reinsurance and Other Forms of Risk Transfer Subcommittee Technical Committee Executive Committee General Meeting Task Force on the Core Curriculum Project Task Force on the Revision of the By-laws

6. IAIS standards setting activities and the Insurance Core Principles 6 Luc Cardinal 5.IAIS Standard Setting Core Principles Principles Supervisory Standards Guidance & Issues Papers Pyramidal approach

7. IAIS standards setting activities and the Insurance Core Principles 7 Luc Cardinal 6.IAIS Document Adoption Working party Technical and Executive Committees General Meeting Drafting and consultation Review and approval Final adoption and publication (hopefully!) WP Members Some Observers IAIS Members & Observers √

8. IAIS standards setting activities and the Insurance Core Principles 8 Luc Cardinal The first ICPs adopted in October 2000, based on 1997 Insurance supervisory principles FSAP (the Financial Sector Assessment Program) started in 1999 Joint Forum comparison of the core principles in banking, insurance and securities sectors in 2001 FSAP experiences Revision of ICPs 7.History of Insurance Core Principles

9. IAIS standards setting activities and the Insurance Core Principles 9 Luc Cardinal Code of Good Practices on Transparency in Monetary and Financial Policies (by IMF) Code of Good Practices in Fiscal Transparency (by IMF) Special Data Dissemination Standard / General Data Dissemination System (by IMF) Principles of Corporate Governance (by OECD) International Accounting Standards (by IASB) 8.12 key standards for sound financial systems (by Financial Stability Forum) International Standards on Auditing (by IFAC) Core Principles for Systemically Important Payment Systems (by CPSS) Recommendations for Securities Settlement Systems (by CPSS/IOSCO) The Forty Recommendations of the FATF/ 8 Special recommendations Against Terrorist Financing (by FATF) Core Principles for Effective Banking Supervision (by BCBS) Objectives and Principles of Securities Regulation (by IOSCO) Insurance Core Principles (by IAIS)

10. IAIS standards setting activities and the Insurance Core Principles 10 Luc Cardinal TitleInsurance Core Principle 1. Introduction Background, scope, implementation and assessment 2. Conditions ICP 1: Conditions for effective insurance supervision 3. The supervisory system ICP 2: Supervisory objectives ICP 3: Supervisory authority ICP 4: Supervisory process ICP 5: Supervisory cooperation and information sharing 4. The supervised entity ICP 6: Licensing ICP 7: Suitability of persons ICP 8: Changes in control and portfolio transfers ICP 9: Corporate Governance ICP 10: Internal control 9.Insurance Core Principles (ICP)

11. IAIS standards setting activities and the Insurance Core Principles 11 Luc Cardinal TitleInsurance Core Principle 5. Ongoing supervision ICP 11: Market analysis ICP 12: Reporting to supervisors and off-site monitoring ICP 13: On-site inspection ICP 14: Preventive and corrective measures ICP 15: Enforcement or sanctions ICP 16: Winding-up or exit from the market ICP 17: Group-wide supervision 6. Prudential requirements ICP 18: Risk assessment and management ICP 19: Insurance activity ICP 20: Liabilities ICP 21: Investments ICP 22: Derivatives and similar commitments ICP 23: Capital adequacy and solvency 10.Insurance Core Principles (ICP)

12. IAIS standards setting activities and the Insurance Core Principles 12 Luc Cardinal TitleInsurance Core Principle 7. Markets and consumers ICP 24: Intermediaries ICP 25: Consumer protection ICP 26: Information, disclosure & transparency towards the market ICP 27: Fraud 8. AML/CFT ICP 28: Anti-money laundering, combating the financing of terrorism Annex 1 References Annex 2 Assessment methodology 11.Insurance Core Principles (ICP)

13. IAIS standards setting activities and the Insurance Core Principles 13 Luc Cardinal 12.Implementation of IAIS standards –Training and seminars –Implementation tools –Self assessment –Provision of Technical Assistance –Assisting FSAP

14. IAIS standards setting activities and the Insurance Core Principles 14 Luc Cardinal 13.Cooperation with others Regular discussion amongst supervisors Joint Forum Financial Stability Forum International Accounting Standard Board International Federation of Accountants International Association of Actuaries Financial Stability Institute The World Bank IMF

15. IAIS standards setting activities and the Insurance Core Principles 15 Luc Cardinal www.iaisweb.org 14.IAIS Website Address