Through the Insurance Core Principles (ICPs), which prescribe the essential elements that must be present in any supervisory regime, the IAIS provides a globally accepted framework for the supervision of the insurance sector. Each ICP links to a number of standards that set out key high level requirements that are fundamental to the implementation of the standard. In addition, guidance material typically supports the ICPs and/or standards, providing detail on how they should be observed or implemented.
Regulators and supervisors, particularly in developing countries, are faced with the challenge of implementing the ICPs in a manner that balances the objectives of protecting policyholders, contributing to local and global financial stability, and enhancing inclusive insurance markets. The purpose of the Application Paper is to provide them with application guidance supporting inclusive insurance markets. Where enhancing inclusive insurance markets is a policy objective, it elaborates guidance for supervisors on how to apply the scope for proportionality provided in relevant areas of the ICPs, giving examples of how relevant principles and standards can be practically applied towards this objective.
As FinMark Trust insurance theme managers, Cenfri is particularly excited about the adoption of the Application paper. Various FinMark Trust research outputs over the years have contributed to the thinking leading up to the drafting of the Application Paper, as has FinMark Trust’s partnership in the global Access to Insurance Initiative. Going forward, the Application Paper and the practical guidance that it provides will be an indispensable tool in our engagements with regulators and supervisors in the SADC region and beyond.
See for example the synthesis findings from a review of regulation in five countries - Colombia, India, the Philippines, South Africa and Uganda – where microinsurance markets have evolved in varying degrees. These findings correspond with the recommendations in the application paper.