IAIS Insurance Core Principles (ICPs)

Insurers are required to be licensed before underwriting business with fit and proper criteria for owners and key persons.

• licence application file
• fit and proper assessments
• business plan review
• approval decision

• informal fit and proper
• no business plan review
• incomplete owner disclosure

Supervisory approval is required for changes in control, mergers and portfolio transfers including assessment of acquirer suitability.

• change of control filings
• supervisor decisions
• portfolio transfer agreements
• policyholder notification records

• transactions completed before approval
• policyholders not notified
• weak acquirer assessment

Insurance intermediaries are subject to licensing, conduct rules and oversight including remuneration disclosure.

• intermediary register
• remuneration disclosure templates
• training records
• complaints data

• unregistered intermediaries
• no remuneration disclosure
• weak training

Insurers and intermediaries treat customers fairly throughout the product lifecycle with suitability and disclosure obligations.

• product oversight policy
• suitability assessment records
• disclosure documents
• complaints register

• product mis selling
• weak suitability checks
• vague disclosures

Information sharing arrangements protect confidentiality while enabling effective supervision and cross border cooperation.

• MoUs with peer supervisors
• confidentiality policy
• data classification policy
• breach response plan

• no MoUs
• data shared without controls
• no logging of requests

The supervisor requires insurers to establish and implement a corporate governance framework providing for sound and prudent management and oversight.

• Insurance supervisory documentation for Corporate Governance
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor requires an insurer to have effective systems of risk management and internal controls, including effective functions for risk management, compliance, actuarial matters, and internal audit.

• Insurance supervisory documentation for Risk Management and Internal Controls
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor takes a risk-based approach to supervision using both off-site monitoring and on-site inspections to examine the business of each insurer.

• Insurance supervisory documentation for Supervisory Review and Reporting
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

Insurers disclose relevant and comparable information on financial position, performance and risk profile.

• annual report
• solvency and financial condition report
• external audit opinion

• disclosures inconsistent year on year
• no risk profile section
• late publication

The supervisor has a range of preventive, corrective and enforcement powers proportionate to issues identified.

• enforcement policy
• ladder of intervention
• sanction register
• public enforcement decisions

• no graduated enforcement
• delayed action
• weak follow up

Insurers value assets and liabilities for solvency purposes on an economic and consistent basis.

• valuation policy
• actuarial methodology document
• external auditor reports
• model documentation

• valuation inconsistent with IAIS guidance
• no peer review
• weak controls over assumptions

Insurers establish investment policies including prudent person principles, asset liability matching and concentration limits.

• investment policy
• ALM reports
• concentration limits report
• investment committee minutes

• no ALM analysis
• limit breaches not escalated
• illiquid assets concentration

Insurers maintain capital adequate to cover risks with regulatory solvency control levels and intervention ladders.

• solvency ratio reports
• capital plan
• early warning thresholds
• intervention triggers

• no early warning indicators
• capital reported infrequently
• no recovery plan link

Insurers and supervisors deter, prevent, detect, report and remedy fraud in insurance.

• fraud risk assessment
• fraud detection systems
• investigation records
• regulator fraud reports

• no fraud function
• no claims fraud analytics
• underreporting

Insurers implement AML CFT controls including customer due diligence, monitoring, reporting and training.

• AML policy
• CDD records
• suspicious transaction reports
• FIU acknowledgements
• training records

• weak CDD for legacy book
• no PEP screening
• low STR filing

The supervisor requires that insurers and intermediaries take effective measures to deter, prevent, detect, report and remedy fraud in insurance.

• Insurance supervisory documentation for Countering Fraud in Insurance
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor requires insurers and intermediaries to take effective measures to combat money laundering and the financing of terrorism.

• Insurance supervisory documentation for Anti-Money Laundering and Combating the Financing of Terrorism
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor has a framework and adequate powers for group-wide supervision of insurers and where appropriate imposes measures on or exercises powers over insurers and non-regulated entities in a group.

• Insurance supervisory documentation for Group-wide Supervision
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor identifies, monitors, and analyses market and financial developments and other environmental factors that may impact insurers and insurance markets.

• Insurance supervisory documentation for Macroprudential Surveillance and Insurance Supervision
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor cooperates and coordinates with other relevant supervisors and authorities for effective supervision of insurers operating on a cross-border basis.

• Insurance supervisory documentation for Supervisory Cooperation and Coordination
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor sets standards on the use of reinsurance and other forms of risk transfer to ensure that insurers adequately control and transparently report their risk transfer programmes.

• Insurance supervisory documentation for Reinsurance and Other Forms of Risk Transfer
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor establishes requirements for the valuation of assets, liabilities, and insurance contracts, for solvency purposes.

• Insurance supervisory documentation for Valuation
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor establishes requirements for solvency purposes on the investment activities of insurers to address the risks faced by insurers.

• Insurance supervisory documentation for Investment
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor establishes enterprise risk management requirements for solvency purposes that require insurers to address all relevant and material risks.

• Insurance supervisory documentation for Enterprise Risk Management for Solvency Purposes
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor establishes capital adequacy requirements for solvency purposes so that insurers can absorb significant unforeseen losses and to provide for degrees of supervisory intervention.

• Insurance supervisory documentation for Capital Adequacy
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

Significant owners, board members, senior management and key control function holders meet fitness and propriety standards.

• background check records
• competency assessments
• board succession plan
• ongoing monitoring records

• no ongoing reassessment
• key function holders not assessed
• weak background checks

Insurers establish corporate governance frameworks with effective oversight, defined roles and risk culture.

• board charter
• committee terms of reference
• board effectiveness review
• code of conduct

• no independent directors
• no board evaluation
• weak conflict of interest policy

Insurance groups are supervised on a group wide basis with a group wide supervisor and coordinated approach.

• group structure chart
• supervisory college minutes
• group wide capital report
• intra group transactions report

• no group wide view
• intra group transactions unmonitored
• no college

An insurer must be licensed before it can operate within a jurisdiction and the requirements and procedures for licensing must be clear, objective and public.

• Insurance supervisory documentation for Licensing
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor requires Board Members, Senior Management, Key Persons in Control Functions and Significant Owners to be and remain suitable.

• Insurance supervisory documentation for Suitability of Persons
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

Supervisory approval is required for proposals to acquire significant ownership or an interest in an insurer and for portfolio transfers.

• Insurance supervisory documentation for Changes in Control and Portfolio Transfers
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor sets and enforces requirements for the conduct of insurance intermediaries to ensure that they conduct business in a professional and transparent manner.

• Insurance supervisory documentation for Intermediaries
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor sets requirements for the conduct of the business of insurance to ensure that customers are treated fairly, both before a contract is entered into and through to the point at which all obligations under a contract have been satisfied.

• Insurance supervisory documentation for Conduct of Business
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor requires insurers to disclose relevant, comprehensive and adequate information on a timely basis in order to give policyholders, market participants and other stakeholders a clear view of their business activities, performance and financial position.

• Insurance supervisory documentation for Public Disclosure
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor takes preventive and corrective measures that are timely, suitable and necessary to achieve the objectives of insurance supervision and applies sanctions where appropriate.

• Insurance supervisory documentation for Preventive Measures, Corrective Measures and Sanctions
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The legislation provides for requirements addressing the exit of insurance legal entities from the market for reasons of portfolio transfer, run-off, or insolvency.

• Insurance supervisory documentation for Exit from the Market and Resolution
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

A resolution regime exists with powers to ensure orderly resolution of insurers with policyholder protection.

• resolution framework
• recovery plans
• policyholder protection scheme rules
• wind down playbook

• no resolution authority
• no recovery plans
• weak policyholder protection

Insurers conduct an Own Risk and Solvency Assessment integrating risk management and capital adequacy.

• ORSA report
• board approval record
• stress scenarios
• capital projection

• ORSA copy paste each year
• no stress testing
• no board discussion

Insurers maintain effective risk management, internal control, internal audit, actuarial and compliance functions.

• risk management framework
• internal audit charter
• actuarial function policy
• control function reporting lines

• control functions not independent
• no actuarial function
• weak internal audit

Insurers manage reinsurance and risk transfer arrangements with appropriate counterparty risk controls.

• reinsurance strategy
• counterparty exposure reports
• contract registers
• credit risk policy

• concentration with one reinsurer
• no contract certainty
• weak collateral controls

The supervisor uses a risk based approach with on site and off site monitoring and regular reporting from insurers.

• risk assessment framework
• regulatory return schedule
• inspection plan
• supervisory action records

• one size fits all approach
• reporting late or incomplete
• no on site inspections

The supervisor has clearly defined objectives, powers and responsibilities for the regulation of insurers.

• enabling legislation references
• supervisory mandate document
• delegation instruments

• no clear statutory basis
• overlapping mandates
• no public disclosure of powers

The supervisor is operationally independent, accountable and adequately resourced with legal protection for staff.

• governance charter
• budget documents
• staffing plan
• appointment and removal procedures

• political interference
• underfunding
• no staff legal protection

The authority responsible for insurance supervision and the objectives of insurance supervision are clearly defined.

• Insurance supervisory documentation for Objectives, Powers and Responsibilities of the Supervisor
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor, in the exercise of its functions and powers, is operationally independent, accountable, transparent, and protects confidential information.

• Insurance supervisory documentation for Supervisor
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

The supervisor exchanges information with other relevant supervisors and authorities subject to confidentiality, purpose, and use requirements.

• Insurance supervisory documentation for Information Sharing and Confidentiality Requirements
• Own Risk and Solvency Assessment (ORSA) report
• Capital adequacy calculation workbooks
• Conduct of business and consumer protection policies
• Group-wide supervision framework documentation

• ORSA does not link risk appetite to capital planning
• Conduct risk indicators not embedded in product governance
• Group supervision arrangements lack supervisory college coordination
• Reinsurance counterparty concentration not stress tested

Supervisors identify and address systemic risks in the insurance sector including data collection and tools.

• sector wide risk dashboard
• stress testing programme
• macroprudential policy framework
• data collection templates

• no sector wide stress test
• data gaps
• no macro tools