On 15 August 2013, the Joint Forum (consisting of the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors) released two consultative reports:
- Longevity risk transfer markets: market structure, growth drivers and impediments, and potential risks. This paper considers the risk of pensions and annuities being paid out for longer than expected due to people living longer. This is becoming a particular concern in relation to the sustainability of current ‘saving for retirement’ products. The Joint Forum made eight recommendations to policymakers and supervisors to ensure that longevity risk transfer (LRT) markets are secure on a prudential and systemic level. These recommendations include the following:
- to communicate and co-operate on longevity risk transfer internationally and cross-sectorally in order to reduce the potential for regulatory arbitrage;
- to seek to ensure that holders of longevity risk under their supervision have the appropriate knowledge, skills, expertise and information to manage it; and
- to take into consideration that longevity swaps may expose the banking sector to longevity tail risk, possibly leading to risk transfer chain breakdowns.
- Point of sale disclosure in the insurance, banking and securities sectors. This paper looks at ways to ensure that consumers across all financial sectors receive adequate product disclosure at the point of sale (POS). In particular it:
- identifies and assesses differences and gaps in regulatory approaches to POS disclosure for investment and savings products across the insurance, banking and securities sectors;
- considers whether regulatory approaches to POS disclosure need to be further aligned across sectors; and
- proposes various recommendations, mainly to policymakers and supervisors, to assist them in considering, developing or modifying their POS disclosure regulations.
Comments on these reports should be submitted by Friday 18 October 2013 by email to [email protected]. Alternatively, comments may be sent by post to: Secretariat of the Joint Forum (BCBS Secretariat), Bank for International Settlements, CH-4002 Basel, Switzerland. All comments may be published on the websites of the Bank for International Settlements, IAIS and IOSCO unless a commenter specifically requests confidential treatment.