- Established in 1994, the International Association of Insurance Supervisors (IAIS) is a voluntary membership organisation of insurance supervisors and regulators from around the globe. It is the international standard-setting body responsible for developing and assisting in the implementation of supervisory and supporting material for insurance supervision. The IAIS also provides a forum for members to share their experiences and understanding of insurance supervision and insurance markets.
- The mission of the IAIS is to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to global financial stability. In this context, the IAIS has issued the Insurance Core Principles (ICPs), which are comprised of Principle Statements, Standards and Guidance, as a globally accepted framework for insurance supervision. The ICPs seek to encourage the maintenance of consistently high supervisory standards in IAIS member jurisdictions. A sound supervisory system is necessary for the protection of policyholders and promoting the stability of the financial system and should address the broad set of risks within, and posed by, the insurance sector.
- The ICP material is presented according to the following hierarchy:
- Principle Statements – the highest level in the hierarchy which set out the essential elements that must be present in a jurisdiction in order to protect policyholders, promote the maintenance of fair, safe and stable insurance markets and contribute to financial stability. In each ICP, the Principle Statement is numbered and presented in a box with bold font.
- Standards – the next level in the hierarchy linked to specific Principle Statements. Standards set out key high-level requirements that are fundamental to the implementation of the Principle Statement and should be met for a jurisdiction to demonstrate observance with the particular Principle Statement. Standards are presented in bold font, with the number of the applicable principle statement followed by the Standard number (for example, the second standard under Principle Statement 3 appears as 3.2).
- Guidance – the lowest level in the hierarchy supporting the Principle Statement and/or Standards. Guidance facilitates the understanding and application of the Principle Statement and/or Standards; it does not represent any requirements. The wording used in Guidance varies to reflect the intended weight of the text; for example, the use of “should” provides more of a recommendation, whereas the use of “may” is more of a suggestion. Where appropriate, Guidance provides examples of ways to implement the Principle Statements and/or Standards. Guidance is presented in regular font, with the number of the Principle Statement and Standard followed by the Guidance number (for example, the first paragraph of guidance under Standard 3.2 appears as 3.2.1).
- There are a number of important overarching concepts to understand and keep in mind when reading and implementing the ICPs. While an individual ICP may focus on one particular subject, the ICPs need to be considered as a whole with these overarching concepts being relevant throughout.
- The ICPs apply to insurance supervision in all jurisdictions regardless of the level of development or sophistication of insurance markets, and the type of insurance products or services being supervised.
- The ICPs apply to the supervision of all insurers, whether private or government-controlled insurers that compete with private enterprises, wherever their business is conducted, including through e-commerce.
- Generally, the ICPs are equally applicable to the business of insurers and reinsurers. Where the ICPs do not apply to reinsurers, this is indicated in the text.
- The ICPs only apply to the supervision of intermediaries where this is specifically indicated.
Proportionality and risk-based supervision
- The ICPs establish the minimum requirements for effective insurance supervision and are expected to be implemented and applied in a proportionate manner. Therefore, proportionality underlies all the ICPs. Supervisors have the flexibility to tailor their implementation of supervisory requirements and their application of insurance supervision to achieve the outcomes stipulated in the Principle Statements and Standards.
- Implementation – proportionality allows the ICPs to be translated in to a jurisdiction’s supervisory framework in a manner appropriate to its legal structure, market conditions and consumers.
- Application – proportionality allows the supervisor to increase or decrease the intensity of supervision according to the risks inherent to insurers, and the risks posed by insurers to policyholders, the insurance sector or the financial system as a whole. A proportionate application involves using a variety of supervisory techniques and practices which are tailored to the insurer to achieve the outcomes of the ICPs. Such techniques and practices should not go beyond what is necessary in order to achieve their purpose.
- Risk-based supervision is a related concept but distinct from proportionality; it means more supervisory activities and resources are allocated to insurers, lines of business or market practices that pose the greatest risk to policyholders, the insurance sector, or the financial system as a whole.
- In these ICPs, terms have the same meaning as set out in the IAIS Glossary.
- The term “supervision” is used to refer to supervision and regulation. Similarly, the term “supervisor” also refers to “regulator”. The expectation is that the Principle Statements and Standards are implemented within a jurisdiction by all authorities in accordance with their respective responsibility in relation to insurance supervision, rather than necessarily by only one authority. Therefore, the term “supervisor” is used to refer collectively to those authorities within a jurisdiction with such responsibility. It is essential that in situations where multiple authorities exist, arrangements be established between them to ensure that the implementation of the Principle Statements and Standards within the jurisdiction occurs within a framework that makes clear which authority is accountable for which functions.
- The term “policyholder” is used to refer to a person (natural or legal) who holds an insurance policy, and includes, where relevant, other beneficiaries and claimants with a legitimate interest in the policy.
- The term “legislation” is used to include primary legislation (which generally requires full legislative consent), secondary legislation and legally enforceable rules set by the supervisor. The ICPs do not generally require a specific form of legislation but where they do this is specifically indicated.
- The term “insurer” means insurance legal entities and insurance groups, including insurance-led financial conglomerates. The Principle Statements and Standards apply to the supervision of insurance legal entities and, unless otherwise specified, to insurance groups, including the head of the insurance group. The application may vary and, where necessary, further guidance is provided.
- It is recognised that the implementation of the Principle Statements and Standards relevant to group-wide supervision may vary across jurisdictions depending on the supervisory powers and structure within a jurisdiction. There are direct and indirect approaches to group-wide supervision.
- Under the direct approach, the supervisor has the necessary powers over the parent and other legal entities in the insurance group and can impose relevant supervisory measures directly on such legal entities, including non-regulated legal entities.
- Under the indirect approach, supervisory powers focus on the insurance legal entities and supervisory measures are applied to those insurance legal entities to address the group-wide risks posed by other entities within the group, including non-regulated legal entities.
There may also be different combinations of elements of direct and indirect approaches.
- Regardless of the approach, the supervisor must be able to deliver effective group-wide supervision, including that all relevant group-wide risks impacting the insurance entities are addressed appropriately.
Group corporate governance and materiality
- The head of an insurance group is ultimately responsible for the group’s sound and prudent management. In doing so, it is important to take into account the risks and activities of the individual legal entities within the group, focusing in particular on those which are material for the group as a whole.
- While the ultimate responsibility for an insurance group’s corporate governance lies with the head of the group, the legal entities within the group are fully responsible for their own sound and prudent management.
- In the context of its mission, the IAIS has issued the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame), which establishes supervisory standards focusing on the effective group-wide supervision of internationally active insurance groups (IAIGs).
- ComFrame provides quantitative and qualitative supervisory minimum requirements tailored to the international activity and size of IAIGs. ComFrame seeks to assist supervisors in: addressing group-wide activities and risks; identifying and avoiding supervisory gaps; coordinating supervisory activities efficiently and effectively between the group-wide and other involved supervisors. ComFrame also aims to provide a basis for comparing IAIG supervision across jurisdictions. However, it does not create a one-size-fits all approach to IAIG supervision as, ultimately, what is important is that supervisors and IAIGs achieve the outcomes described by ComFrame.
- As part of ComFrame, the IAIS is developing an insurance capital standard (ICS), which aims to provide a globally comparable risk-based measure of capital adequacy of IAIGs. ICS Version 2.0 is presented in a stand-alone document and is being used during a five-year monitoring period for confidential reporting to group-wide supervisors and discussion in supervisory colleges. The ICS is not used as a group-wide Prescribed Capital Requirement (PCR) during the monitoring period. In the second phase of implementation of ICS Version 2.0, the ICS will be implemented as a group-wide PCR.
- The ICPs are applicable to the supervision of all insurers within a jurisdiction, which includes IAIGs. ComFrame provides additional Standards and Guidance applicable only to the supervision of IAIGs. The qualitative requirements of ComFrame material is presented in blue boxes within the relevant ICP material, following a similar hierarchy to the ICPs:
- ComFrame Standards – the highest level in the ComFrame hierarchy which build on certain ICP Principle Statements and/or ICP Standards. ComFrame Standards are outcomes-focused, specific requirements for supervisors. ComFrame Standards are presented in bold font, and follow the numbering of the relevant ICP Principle Statement and/or ICP Standard with the addition of “CF” and a letter (for example, the second ComFrame Standard under ICP Standard 7.2 would appear as CF 7.2.b).
- ComFrame Guidance – the lowest level in the ComFrame hierarchy which provides support for ComFrame Standards. ComFrame Guidance is intended to facilitate the understanding and application of a ComFrame Standard; it does not represent any requirements. Where appropriate, ComFrame Guidance provides examples of ways to implement a ComFrame Standard. ComFrame Guidance is presented in regular font, with the number and letter of the ComFrame Standard followed by the ComFrame Guidance number (for example, the first paragraph of ComFrame Guidance under ComFrame Standard CF 7.2.b would appear as CF 7.2.b.1).
- The overarching concepts identified in the ICP Introduction are equally applicable to ComFrame, in particular proportionality. Additionally, there are several, ComFrame-specific overarching concepts to understand and keep in mind when reading and implementing ComFrame.
Allocation of roles
- The group-wide supervisor takes responsibility for the supervision of the IAIG as a whole, on a group-wide basis. Other involved supervisors are responsible for the supervision of the IAIG’s individual insurance legal entities in their respective jurisdictions and take into account the effect of their supervisory actions on the rest of the IAIG.
- IAIGs have different models of governance (ie more centralised or more decentralised). ComFrame does not favour any particular governance model and is intended to be read to apply to all models. The organisation of an IAIG can be structured in various ways as long as the outcomes are achieved.
- Similar to the ICPs, ComFrame, for the most part, is neutral as to direct or indirect approaches to group-wide supervision, so long as the intended outcomes of the group-wide supervision are achieved. Where ComFrame uses a direct approach for certain powers, it is indicated in the relevant ComFrame Standards.
B) Assessment Methodology
- The IAIS strongly encourages implementation of the ICPs as a means to ensure each jurisdiction has a framework for effective insurance supervision. Assessment of a jurisdiction’s observance of the ICPs can facilitate effective implementation by identifying the extent and nature of strengths and weaknesses in a jurisdiction’s supervisory framework – especially those aspects that could affect policyholder protection and financial stability.
- The framework described by the ICPs is general. When implementing the ICPs in a jurisdiction, it is important to take into account the domestic context, characteristics of the insurance sector and developmental stage of the financial system and overall macroeconomic conditions. How the ICPs are implemented will vary across jurisdictions. While established implementation practices should be kept in mind, there is no mandated method of implementation. When carrying out an assessment, it is important to take into account factors that have shaped the implementation choices made in the jurisdiction.
- Assessments against the ICPs can be conducted in a number of contexts including:
- self-assessments performed by the jurisdiction itself. These may be performed with the assistance of outside experts and/or followed by peer review and analysis;
- reviews conducted by third parties; or
- reviews in the context of the Financial Sector Assessment Program (FSAP) conducted by the International Monetary Fund (IMF) and World Bank.
- The methodology that should be followed when carrying out an assessment of a jurisdiction’s observance of the ICPs is set out below. Following the methodology should result in greater consistency between assessments, especially assessments of different jurisdictions performed by different assessors. While the results of an assessment may not always be made public, it is still important for their credibility that similar types of assessments are conducted in a broadly uniform manner from jurisdiction to jurisdiction.
Scope of assessments
- An assessment may be conducted on a system-wide jurisdictional basis or focus on specific areas. While thematic assessments have a role, the IAIS has designed the ICPs as a comprehensive and holistic framework, with each ICP being integral in the creation of a sound supervisory system.
- Where more than one authority is involved in a jurisdiction’s insurance supervision process, the allocation and interaction of supervisory roles should be clearly described in the assessment. If an assessment is conducted in the context of an individual authority within a jurisdiction, a Standard may be not applicable if responsibility (either for its implementation or its delivery on a day-to-day basis) lies with another authority within that jurisdiction. However, the authority responsible for the observance of that Standard should be indicated in the report.
- The ICPs are written to be equally applicable to both life and non-life sectors. However, where there are material differences between the life and non-life sectors, such that it would give rise to different results had they been assessed separately, the assessor may consider assigning separate levels of observance for each sector accordingly. In such cases, the distinction should be clearly identified and explained in any assessment report.
Use of experts
- The process of assessing observance of the ICPs requires a judgmental weighing of numerous elements. It is important, therefore, that assessors are well qualified with relevant background, professional knowledge and practical experience. Assessors not familiar with insurance supervision, the insurance sector or entities and products that may be unique to the jurisdiction being assessed, could come to incorrect or misleading conclusions.
Access to information
- When conducting an assessment, assessors need to have access to a range of information and people. The required information may include published information (such as the legislation and administrative policies) as well as non-published information (such as self-assessments performed and operational guidelines used by the supervisor). The supervisor may provide confidential information to the assessors, provided confidentiality is preserved. Information should be provided to and analysed by the assessors in advance, to the extent possible, to ensure that any on-site visits are efficient and derive the most value. The assessors may need to meet with various individuals and organisations, including the supervisor, other domestic supervisory authorities, relevant government ministries, insurers and insurance industry associations, consumer groups, actuaries, auditors, and other financial sector participants.
- Assessments should be based solely on the legislation and supervisory practices that are in place at the time. As a result, it is important to recognise when an assessment is conducted and to record this in the report. Nevertheless, improvements already proposed or scheduled for implementation by the supervisor should be noted in the assessment report by way of additional comments so as to provide recognition for efforts that are important, but not yet fully implemented. Additionally, the assessment should consider whether supervisory practices adequately meet the outcomes provided for in legislation and whether the supervisor enforces compliance. Having legislation without the necessary corresponding supervisory practices is not sufficient to demonstrate full observance.
- Performing an assessment is not an exact science. Assessors should perform a comprehensive assessment of the degree and effectiveness of implementation for each Principle Statement and Standard rather than a checklist approach. The goal of the assessment should not be simply to apply a grade to the level of observance but to identify areas that need attention in order for the jurisdiction to achieve the outcomes identified in the ICPs.
Assessment of Standards
- The Standards set requirements that are fundamental to the implementation of each Principle Statement. They also facilitate assessments that are comprehensive, precise and consistent. In making an assessment, each of the Standards under a Principle Statement has to be considered. As noted in the ICP Introduction, Guidance is intended to facilitate the understanding and application of the Principle Statement and/or Standard and does not prescribe any requirements, therefore it should not be assessed for observance.
- The Standards should be assessed using five categories:
- Observed – for a Standard to be considered observed it is necessary that the supervisor has and exercises, when required, the legal authority and supervisory practices to effectively perform the requirements of the Standard. Having legislation without supervisory practices to implement a Standard is insufficient to be considered observed, except for those Standards that are specifically focused on legislation itself and what it contains. For supervisory practices which may lack explicit legal authority, the assessment should be considered as observed if the practice is clearly substantiated by the supervisor and is generally accepted by stakeholders. Having the necessary resources is essential for the supervisor to implement Standards effectively.
- Largely observed – for a Standard to be considered as largely observed, it is necessary that only minor shortcomings exist which do not raise any concerns about the supervisor’s ability and intent to achieve full observance with the Standard within a prescribed period of time. The assessment of largely observed can be used when the jurisdiction does not meet all the criteria, but the overall effectiveness is sufficiently good and no material risks are left unaddressed.
- Partly observed – for a Standard to be considered partly observed, there are sufficient shortcomings to raise doubts about the supervisor’s ability to achieve observance.
- Not observed – for a Standard to be considered not observed, there is no substantive progress toward achieving observance.
- Not applicable – for a Standard to be considered not applicable, the Standard does not apply given the structural, legal and institutional features of a jurisdiction.
Assessment of Principle Statements
- As noted above, the level of observance for each Principle Statement reflects the assessments of its Standards. The Principle Statements should be assessed using five categories:
- Observed – for a Principle Statement to be considered observed, all the Standards must be considered observed (except any Standards that are considered not applicable).
- Largely observed – for a Principle Statement to be considered largely observed, it is necessary that only minor shortcomings exist which do not raise any concerns about the supervisor’s ability to achieve full observance with the Principle Statement.
- Partly observed – for a Principle Statement to be considered partly observed, there are sufficient shortcomings to raise doubts about the supervisor’s ability to achieve observance.
- Not observed – for a Principle Statement to be considered not observed, there is no substantive progress toward achieving observance.
- Not applicable – for a Principle Statement to be considered not applicable, all the Standards must be considered not applicable.
- The IAIS does not prescribe a set format or content of reports that result from an assessment. However, it is recommended that an assessment report should:
- be in writing;
- identify the scope and timing of the assessment;
- identify the assessors;
- provide an assessment of observance;
- refer to the information reviewed and meetings conducted, and note when any necessary information was not provided and the impact that this may have had on the accuracy or completeness of the assessment;
- include any formal comments provided by the supervisor in response to the assessment; and
- include prioritised recommendations for improving observance of the ICPs assessed.
- While encouraged, it is the jurisdiction’s discretion whether to publish the results of an assessment. Nevertheless, it is important for the credibility of assessments that they are conducted in a broadly uniform manner across jurisdictions.
ComFrame Assessment Methodology
- As with the ICPs, the IAIS strongly encourages implementation of ComFrame as a means to ensure that jurisdictions to which ComFrame is applicable have a framework for effective supervision of IAIGs. In general, the assessment methodology described for the ICPs is applicable to ComFrame. However, given the nature of ComFrame, which provides quantitative and qualitative supervisory requirements tailored to the international activity and size of IAIGs, there are some additional considerations that should be taken into account when assessing observance of ComFrame requirements.
Role of involved supervisors
- ComFrame seeks to assist supervisors in coordinating supervisory activities efficiently and effectively between the group-wide and other involved supervisors, thus a number of ComFrame Standards address coordination. However, it is recognised that having efficient and effective coordination depends on all involved supervisors. The group-wide supervisor relies on the other involved supervisors to do their part and vice versa. Where there are shortcomings with an involved supervisor doing their part for coordination, there are limits to what the other supervisors can do to improve the situation. When assessing parts of ComFrame that focus on coordination, this should be taken into account.
- The type of assessment of a jurisdiction’s implementation of ComFrame will depend on whether, in that jurisdiction, there is: a group-wide supervisor of an IAIG; an other involved supervisor; or both. Most ComFrame Standards are addressed to the group-wide supervisor and describe the outcomes they are expected to achieve, whereas some ComFrame Standards also include the other involved supervisors. Therefore, an assessment of a jurisdiction’s implementation of ComFrame should reflect the role it has in the supervision of an IAIG. A jurisdiction where there is only an other involved supervisor will not be assessed on the implementation of ComFrame Standards that are addressed only to the group-wide supervisor.
- For ComFrame Standards that are addressed to both the group-wide supervisor and other involved supervisors, the assessment of those Standards should be based on the role of the jurisdiction’s supervisor. An assessment of a group-wide supervisor jurisdiction should focus on whether it has put in place the necessary legislation and supervisory practices for coordination with the other involved supervisors, whereas an assessment of an other involved supervisor jurisdiction would focus on its role within this context (for example, coordinating with the group-wide supervisor on processes, exchanging information).
- Involved supervisors are encouraged to share the results of an assessment within the supervisory college for information.
- As some ComFrame Standards focus on coordination and information exchange between the group-wide supervisor and other involved supervisors, in demonstrating observance of such Standards there may be more emphasis on supervisory practices rather than legislation. While legislation provides the authority to coordinate and exchange information, the supervisor, more importantly, needs to have appropriate supervisory practices for coordination in place that facilitate effective supervision of an IAIG.
Interaction with assessments of ICPs
- The ICPs are applicable to the supervision of all insurers within a jurisdiction, which includes IAIGs. ComFrame provides additional Standards and Guidance applicable only to the supervision of IAIGs. As the ICPs provide the necessary foundation for ComFrame, an assessment of ComFrame Standards cannot be done in isolation. It should be determined in advance of an assessment whether the level of observance of ComFrame Standards is included when assessing the level of observance of the relevant Principle Statements within the ICPs or whether an assessment of the level of observance of ComFrame Standards is treated separately.
Preconditions for effective insurance supervision
- An effective system of insurance supervision requires a number of preconditions to be in place, as they can have a direct impact on supervision in practice. An assessment of a jurisdiction’s observance of the Principle Statements and Standards may involve a review of preconditions for effective insurance supervision.
- This section provides a number of categories of preconditions and descriptions of how each precondition may be reviewed. The preconditions include:
- sound and sustainable macroeconomic and financial sector policies;
- a well-developed public infrastructure;
- effective market discipline in financial markets;
- mechanisms for providing an appropriate level of protection; and
- efficient financial markets.
- As these preconditions are normally outside the control or influence of the supervisor, and because they are beyond the scope of the ICPs, an assessment should not evaluate a jurisdiction’s observance of the preconditions. Instead, the objective of a review of preconditions is to help inform an assessment of observance of the ICPs because the preconditions can directly impact the effectiveness of supervision. Where shortcomings exist, the supervisor should make its government aware of these and their actual or potential repercussions for the achievement of supervisory objectives and seek to mitigate the effects of such shortcomings on the effectiveness of supervision.
- Any report on a review of preconditions should:
- be descriptive and not express an opinion on the adequacy of policies in these areas, other than through reference to analyses and recommendations in existing official documents;
- include an analysis of the linkages between these factors and the resilience of the insurance sector, when relevant;
- give a clear picture of the adequacy of the preconditions within the jurisdiction and the interaction of the preconditions with the assessment of observance with the ICPs; and
- flag any individual ICPs which are most likely to be affected by any material weakness in the preconditions.
Sound and sustainable macroeconomic and financial sector polices
- Sound macroeconomic policies are the foundation of a stable financial system. This is not within the mandate of supervisors, although they will need to react if they perceive that existing policies are undermining the safety and soundness of the financial system. In addition, financial sector supervision needs to be undertaken within a transparent government policy framework aimed at ensuring financial stability, including effective supervision of the insurance and other financial sectors.
- A review of this precondition should include a review of the relevant government financial sector policies, including whether there is a clear and published framework assigning responsibility to different bodies involved in financial stability and supervisory work.
Well-developed public infrastructure
- A well-developed public infrastructure contains the following elements which, if not adequately provided, can contribute to the weakening of the financial system or frustrate their improvement:
- a system of business laws, including corporate, insolvency, contract, consumer protection and private property laws, which is consistently enforced and provides a mechanism for the fair resolution of disputes;
- an efficient and independent judiciary;
- use of comprehensive and well-defined accounting principles and rules that command wide international acceptance;
- a system of independent audits for companies to ensure that users of financial statements, including insurers, have independent assurance that the accounts provide a true and fair view of the financial position of the company and are prepared according to established accounting principles, with auditors held accountable for their work;
- the availability of skilled, competent, independent and experienced actuaries, accountants and auditors, whose work complies with transparent technical and ethical standards set and enforced by official or professional bodies in line with international standards and is subject to appropriate oversight;
- well defined rules governing, and adequate supervision of, other financial sectors;
- access to a secure payment and clearing system for the settlement of financial transactions where counterparty risks are controlled; and
- the availability to the supervisor, financial services and public of basic economic, financial and social statistics.
- A review of the public infrastructure should focus on elements relevant to the insurance sector.
Effective market discipline in financial markets
- Effective market discipline depends, in part, on adequate flows of information to market participants, appropriate financial incentives to reward well-managed institutions, and arrangements that ensure investors are not insulated from the consequences of their decisions. Among issues to be addressed are the existence of appropriate corporate governance frameworks and ensuring that accurate, meaningful, transparent and timely information is provided by issuers and borrowers to investors and creditors.
- A review of the effectiveness of market discipline could cover issues such as:
- the presence of rules on corporate governance;
- transparency and audited financial disclosure;
- appropriate incentive structures for the hiring and removal of managers and Board members;
- protection of shareholders’ and other stakeholders’ rights;
- adequate availability of market and consumer information; and
- an effective framework for new entrants, mergers, takeovers, and acquisition of equity interests, including those involving foreign entities.
Mechanisms for providing an appropriate level of policyholder protection
- In general, deciding on the appropriate level of policyholder protection is a policy question to be addressed by each jurisdiction. Protection mechanisms could include, for example, a hierarchy of claims or a policyholder protection scheme. Provided such mechanisms are transparent and carefully designed to limit moral hazard, they can contribute to public confidence. For issues such as crisis management or the resolution of an insurer, the supervisor should have a role to play given its in-depth knowledge of the entities involved.
Efficient financial markets
- Efficient financial markets are important to provide investment and risk management opportunities for insurers. Insurers benefit by having access to domestic and global financial markets.
- A review of whether there are efficient financial markets could cover, for example, the range of instruments and issuers (eg is there a spread of public sector issues, index-linked as well as conventional government bonds) and the spread of available maturities. A review could take note of how liquidity has been affected in markets in periods of stress. A review should focus on relevant issues for the carrying on of insurance business, taking into account the products offered, such as whether annuities or other long term contracts of insurance are provided.