The International Association of Insurance Supervisors (IAIS) has published a guidance paper which considers the risks posed to insurance groups by non-regulated entities. The paper aims to encourage the establishment of consistent approaches to supervision to enable authorities to have sufficient regard to all the entities which may affect a group.
The paper considers the various risks which non-regulated entities (both non-operating holding companies and non-regulated operating entities) may pose within a group. The paper examines four main areas of risk which these non-regulated entities may pose: contagion effects, financial position, governance and supervisory reach. In addition, 8 key features of effective treatment of non-regulated entities in group-wide supervision are identified by IAIS.
For further information: IAIS guidance paper on the supervision of non-regulated entities in group wide supervision.