OECD, the Organization for Economic Cooperation and Development, in November 2018 issued a new report, The Institutional Structure of Insurance Regulation and Supervision [1], which presents the results of a stocktaking of the institutional structure of insurance regulation and supervision practices in 50 OECD and non-OECD countries.
The report is based on responses to a questionnaire circulated to OECD and non-OECD countries, with cooperation from the International Association of Insurance Supervisors (IAIS). Responses were received from 28 OECD countries and 22 non-OECD countries.
The report examines both conceptual and practical issues beyond Insurance Core Principles (ICPs) as well as practices in other sectors. It takes several factors into consideration, including the various methods of standards implementation and the role of political engagement in the process of developing and informing insurance regulation. The executive summary states:
Legislation and policy related to the insurance sector will usually be developed by institution(s), including those of the legislative and the executive branch, which means that legislative independence is not generally sought, and input from other non-executive branch institutions involved will routinely be sought. On the other hand, non-legislative regulations, as well as non-binding guidelines etc., are often developed by an insurance regulator that is not part of the executive branch, where independence of regulation becoming an important consideration.
The report underscores the necessity of a better definition of the terms insurance regulation, and supervision to avoid confusion between different OECD and non-OECD countries, and give enough clarity to avoid ‘uncertainties and disagreement among the stakeholders that are involved’.
A response to the demand of policy makers for a better understanding of country practices in support of their efforts to ensure more effective and efficient insurance supervision, the full report can be downloaded here in PDF format [2]. It should be of great interest to insurance carriers and to consultants.
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