Public Consultation on Climate risk supervisory guidance – part one
The consultation closed on 16 May 2023.
Climate change is a key strategic theme for the IAIS as it is a source of financial risk, which impacts the resilience of individual insurers as well as financial stability. In May 2021, the IAIS published an initial Application Paper on the Supervision of Climate-related risks in the Insurance Sector. Since then, the IAIS has closely monitored developments in global climate change mitigation efforts, climate science and how supervisory practices to manage climate-related risks have evolved. In 2022, the IAIS performed a gap analysis of existing IAIS supervisory material to assess how climate risk is already captured and to identify possible further work in terms of standard-setting and/or providing further guidance on supervisory practices. In consideration of the gap analysis outcome, the IAIS intends to publicly consult on limited changes to guidance related to various ICPs and to develop supporting material in several consultations over the next 18 months.
This first consultation outlines proposed changes to the ICP Introduction, which positions climate risk within the global framework for insurance supervision. Additionally, the IAIS discusses whether it is necessary to make changes to the existing supporting material related to governance, risk management and internal controls (ICP 7 and 8). Finally, the consultation includes questions seeking stakeholder feedback on the overall climate-related work as it relates to supervisory guidance. This document also provides an update on the overall work programme of the IAIS in promoting a globally consistent supervisory response to climate change within the insurance sector.
A public background session was held via webinar on 29 March 2023 to present the paper and answer questions from stakeholders. Click here for the recording.