Description:
IAIS MMoU
A formal multilateral agreement established by the IAIS for cooperation and information exchange between IAIS Members who are Signatory Authorities regarding the supervision of insurers where cross-border aspects arise. It includes procedures for requesting and providing information on operations of insurers supervised by all Signatory Authorities having a legitimate interest. This MMoU covers all issues related to the supervision of insurers such as licensing, ongoing supervision and winding-up processes (where necessary).
IBNER provisions
Incurred but not enough reported (IBNER) provisions: additional provisions for claims incurred but for which not enough has been reserved.
IBNR provisionIncurred but not reported (IBNR) provision: provision for claims incurred but not reported by the balance-sheet date. That is, it is anticipated that there would be a number of policies that have, but for the advice of the claim to the insurer, occurred and therefore are likely to result in a liability on the insurer. The magnitude of this provision can be expected to reduce as the time since the insurance risk on the contract expired extends. The magnitude is also likely to vary depending on the type of insurance risk covered by any particular class of insurance contract.
Indemnity reinsurance agreement
The ceding entity remains legally responsible for all policyholder obligations of the reinsured policies. The assuming entity indemnifies, or protects, the ceding entity against one or more of the risks in the reinsured policies.
Indirect approach
A supervisory approach to non-regulated entities which relies on exercise of supervisory powers through a regulated entity in the group.
Insurance group
A group is considered to be an insurance group for the purpose of group-wide supervision if there are two or more entities of which at least one is an insurer and one has significant influence on the insurer. The significance of influence is determined based on criteria such as (direct or indirect) participation, influence and/or other contractual obligations; interconnectedness; risk exposure; risk concentration; risk transfer; and/or intra-group transactions and exposures.
Insurance intermediary
Any natural person or legal entity that engages in insurance intermediation.
Insurance intermediation
The activity of soliciting, negotiating or selling insurance contracts through any medium1.
Where:
· “Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company for compensation.
· "Negotiate" means the act of conferring directly with, or offering advice directly to, a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
· "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
1 In some jurisdictions certain supplemental functions are included in the definition of intermediation.
Insurance legal entity
Denotes either a stand-alone insurer or an insurer which is a member of an insurance group.
Insurance risk
see Technical risks
Interest rate risk
The risk of exposure to losses resulting from movements in interest rates.
Internal controls
The various operational procedures by which an insurer maintains compliance with Board and management policies. Such procedures include the regular reporting of key financial statistics, the adherence to tolerance limits, and the use of feedback loops. The internal controls should address checks and balances such as cross checking, dual control of assets and double signatures.
Internal models
The model which an insurer uses to calculate its regulatory capital which appropriately reflects its risk profile, based on accurate and appropriate data and adequate actuarial and statistical techniques that are commensurate with the nature, scale and complexity of its business.
Investment management
The process of managing an insurer's investment portfolio given its investment strategies and risk tolerances. [Related definitions: Investment policy, Investment risk management, Investment risks, Investment strategy, Investment risk exposures.]
Investment policy
An insurer's policy with respect to the overall characteristics for an investment portfolio or for the investments of the insurer as a whole.
Investment risk exposures
Measures of the amounts by which an insurer's financial position may vary adversely as a result of its investment policy and management.
Investment risk management
The process an insurer uses to identify investment risk exposures, and to monitor, measure, report, and mitigate this risk.
Investment risks
The various kinds of risk which are directly or indirectly associated with the insurers' investment policy and management. (These are usually categorised as market risk, credit risk, liquidity risk, operational risk.)
Investment strategy
The overall direction by the insurer's investment management which governs and implements the insurer's investment policy and investment risk management policy.
Involved supervisors
Supervisors engaged in the supervision of an insurance group. Depending on the circumstances of the particular insurance group and the jurisdictions in which it operates, it could include all supervisors engaged in the supervision of entities within the insurance group.
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