Public background session on the second public consultation on climate risk supervisory guidance

The IAIS hosted a webinar on 12 December from 13:00 to 14:30 CET to provide background on the public consultation on climate risk supervisory guidance relating to market conduct and scenario analysis.

The consultation includes the following two draft application papers:

• Draft Application Paper on climate risk market conduct issues in the insurance sector  aims to support supervisors in their efforts to identify instances of potential unfair treatment of consumers that can emerge in relation to natural catastrophe (NatCat) protection products or sustainability-focused products, for example through “greenwashing” or misleading information on the sustainability of an insurer’s operations. The paper will assist supervisors in considering the climate-related aspects of ICP 19 (Conduct of Business) and ICP 21 (Countering Fraud in Insurance).
• Draft Application Paper on climate risk scenario analysis in the insurance sector focuses on the use of climate-related scenario analysis as a tool used by both supervisors and insurers to understand the risks to which the insurance sector is exposed at a micro- and macroprudential level. The paper considers why and how climate-related scenario analysis exercises should be used and the extent to which they can overcome some of the shortcomings of existing methods for assessing risks. In particular, the paper focuses on how climate-related scenario analysis should be considered in light of the standards set out in ICP 16 (Enterprise Risk Management for Solvency Purposes) and ICP 24 (Macroprudential Supervision).

Slides for the session are available here. 

The recording of the session can be found below.