The International Association of Insurance Supervisors (IAIS) may be close to giving details about preliminary methods for identifying “globally systemically important financial institutions” (G-SIFIs).

The Financial Stability Board (FSB), Basel, Switzerland – talks about progress on efforts to develop a system for identifying G-SIFIs in a report prepared for the Group of 20 Developed Countries (G20) meeting held this past weekend in Paris.

The G20 set up the FSB in the hope that it could help design strategies for increasing the stability of the world financial system. One goal is to give financial companies that are too Earthinterconnected to fail extra attention. In November 2010, in Seoul, Korea, the G20 leaders said G-SIFIs should have “higher loss absorbency capacity.”

The FSB is supposed to come up with ideas for adding loss absorbency by the end of 2011. The public should get a chance to comment on G-SIFI loss absorbency proposals during the second half of 2011, the FSB says.

By mid-2011, the FSB and national authorities are supposed to decide which institutions may initially be affected by the FSB G-SIFI recommendations, the FSB says.

Bank supervisors already have developed draft methods for identifying systemically important banks, and they are revising the draft “to better capture global activities, and to strengthen the measurement of interconnectedness, substitutability and complexity,” the FSB says.

The IAIS, Basel, has been giving the FSB reports on preliminary efforts to develop preliminary methods for identifying systemically important insurers. More details could be available in March, the FSB says.

Insurers regulators say they are having a harder time partly because insurance is different from banking, and bankers tend not to understand how different.

The IAIS will give the FSB advice about “what measures could be applied to insurers identified as G-SIFIs, taking into account the differences in characteristics of business models between insurers and banks,” the FSB says.