IAIS: Common Framework Project Sets Sail

The ComFrame task force is supposed to come up with methods for supervising insurers that do business in two or more countries; establish a “comprehensive framework for supervisors to address group-wide activities and risks and also set grounds for better supervisory cooperation”; and “foster global convergence of regulatory and supervisory measures and approaches.”

If the task force succeeds, then regulators in home countries and other countries where an insurer does business will provide better-aligned, more consistent supervision, officials say.

The ComFrame task force will not directly address “systemic risk,” or the danger that problems at a company could threaten stability of the world financial system.

“However, it is the belief of the IAIS that when ComFrame is implemented and functional, supervisors will have improved tools and means to address, and where possible, mitigate risk that may affect insurers,” officials say.

“Industry experts will be regularly consulted as the work progresses to ensure the approaches developed in ComFrame are reflective of actual business practices and group structures,” officials say.