Conduct and culture

Culture and conduct are of increasing importance for insurance supervision. Both prudential and conduct supervisors look for a more holistic approach across prudential and market conduct approaches, recognising that conduct risk can also have considerable financial impact.

Technological changes to the insurance business model present new conduct challenges, such as the supervision of the use of advanced data analytics. The IAIS supports a holistic approach to market conduct and prudential supervision, recognising that conduct and culture issues could lead to financial soundness and stability concerns.

Supervisory practices

The ICPs describe clear roles and responsibilities for setting the cultural tone of the insurer as well as for the practical embedment of this tone across the various levels and functional areas of the insurer. Various ICPs make explicit reference to supervisory expectations regarding insurer culture, in particular ICP 7 (Corporate Governance), ICP 8 (Risk Management and Internal Controls) and 19 (Conduct of Business).

The IAIS also developed the Issues Paper on Insurer Culture, which explores the role of insurer culture as a point of intersection for managing prudential and conduct risks. The paper also provides illustrations of selected cultural drivers using jurisdictional examples.

There are also interlinkages between insurer culture and the aspects of Diversity, Equity and Inclusion (DE&I). Click here to learn more about the IAIS work on DE&I.

Issues related to conduct are covered mainly by ICP 18 (Intermediaries) and ICP 19 (Conduct of business) as well as a number of Issues Papers and Application Papers.

Recent events
  • 6 December 2021, IAIS Stakeholder Session, including on the Issues Paper on Insurer Culture and outcomes of the public consultation

Implementation assessment

Recently the IAIS published two reports related to the implementation assessment in the area of conduct and culture. The aggregate report of the Peer Review of Corporate and Risk-Governance relative to the standards set out in Insurance Core Principles 4, 5, 7 and 8 was finalised in June 2020 and the aggregate report of the Peer Review of Conduct of Business Supervision relative to the standards set out in Insurance Core Principle 19 was finalised in June 2021.

More information about IAIS assessment activities can be found here.

Key documents