Holistic Framework
In December 2022, the Financial Stability Board (FSB) endorsed the IAIS Holistic Framework for the assessment and mitigation of systemic risk in the insurance sector. The FSB, in consultation with the IAIS, decided that the Holistic Framework provides a more effective basis for assessing and mitigating systemic risk in the insurance sector than G-SII identification.
Going forward the FSB will utilise assessments available through the Holistic Framework to inform its considerations of systemic risk in the insurance sector. The FSB will continue to receive from the IAIS an annual update on the outcomes of its GME, including potential concentration of systemic risks at an individual insurer and sector-wide level and the supervisory response to identified risks. In November 2025, the FSB will also review its experiences with the process of assessing and mitigating systemic risk based on the Holistic Framework.
Through the experience of the past three years, we see the Holistic Framework has proven robust and is a better approach to assessing and mitigating systemic risk in insurance,” commented Jonathan Dixon, IAIS Secretary General. “Going forward, it will be important to continue refining the global risk assessment and ensuring robust implementation of supervisory measures, with strong engagement of insurers and supervisors.
IAIS press release, December 2022
Key elements of the Holistic Framework
The Holistic Framework is underpinned by three key elements, namely, the Global Monitoring Exercise (GME), an integrated set of enhanced macroprudential supervisory policy measures, and robust implementation assessment.
