ICP 23 Group-wide Supervision

The group-wide supervisor, in cooperation and coordination with other involved supervisors, identifies the insurance group and determines the scope of group supervision.

Introductory Guidance


23.0.1

Involved supervisors should seek agreement amongst themselves on the identification of the insurance group, including the head of the insurance group, and the scope of group-wide supervision to ensure that gaps or duplication in regulatory oversight between jurisdictions do not occur. If agreement cannot be reached in a timely manner, the ultimate responsibility for determining the identification of the insurance group and scope of group-wide supervision rests with the group-wide supervisor. Decisions should be undertaken on a case-by-case basis and may include discussion with the insurance group.

23.0.2

The group-wide supervisor cooperates and coordinates with other involved supervisors, and should be accountable for the appropriateness of the identification of the insurance group and the determination of the scope of group supervision. In particular, in the case of insurance groups that operate on a cross-border basis, the group-wide supervisor should be able to explain the appropriateness of the identification of the insurance group and the determination of the scope of group supervision to involved supervisors in other jurisdictions. The identification of the insurance group and scope of group supervision should be reviewed regularly by the group-wide supervisor, in cooperation and coordination with other involved supervisors.

23.0.3

The group-wide supervisor should require the head of the insurance group to provide information needed on an ongoing basis to identify the insurance group and to determine the scope of group-wide supervision. The head of the insurance group provides the information to the group-wide supervisor, who disseminates it to the other involved supervisors as needed.

CF 23.0.a
The group-wide supervisor, in cooperation with other involved supervisors, determines whether an insurance group or an insurance legal entity operating through branches, is an IAIG after considering whether it meets both the following criteria:
  • Internationally active:
    • Premiums are written in three or more jurisdictions; and
    • Gross written premiums outside of the home jurisdiction are at least 10% of the group’s total gross written premiums.
  • Size (based on a three-year rolling average):
    • Total assets are at least USD 50 billion, or
    • Total gross written premiums are at least USD 10 billion.

CF 23.0.a.1
The criteria should be assessed based on the insurance group’s reported financial statements, either on a consolidated basis when available or as otherwise submitted to the group-wide supervisor. Intra-group transactions should be eliminated when calculating the amount of insurance business written in each jurisdiction and total insurance business written, and when calculating the total assets of the group.

​CF 23.0.a.2
“Total assets” are, at least, group assets related to the insurance business of the group.

​CF 23.0.a.3
“Gross written premiums” represent a measure of the volume of insurance business being written. Where alternative but similar volume measures are required under the accounting framework applicable to the group, then these alternative measures may be used as a more practical way of deciding if a group meets the criterion for an IAIG. An example of an alternative measure may be “premiums received” as required for disclosure purposes under International Financial Reporting Standard 17.

​CF 23.0.a.4
Although an insurance legal entity that has no parent or subsidiaries is not an insurance group, it should be regarded as an IAIG if it operates on a branch basis in foreign jurisdictions and meets the criteria. The supervisor of this entity, in cooperation with other involved supervisors, would determine whether the IAIG criteria are met. References to a ‘group’ in this context would include such entities operating through branches which are identified as IAIGs.

​CF 23.0.a.5
For the purposes of assessing groups against the internationally active criterion, the United States of America should be regarded as a single jurisdiction and member states of the European Union should be regarded as separate jurisdictions.

​CF 23.0.a.6
Any involved supervisor may prompt the process of identifying an IAIG. If no group-wide supervisor has been determined, the supervisor most demonstrating the characteristics of a group-wide supervisor should invite involved supervisors to participate in the process of determining whether a group is an IAIG.

​CF 23.0.a.7

The scope of an insurance group should be determined before considering whether the criteria for determining whether the group is an IAIG are met.

​CF 23.0.a.8

If there is already a supervisory college for a group, it should be used to facilitate the determination as to whether the group is an IAIG.

​CF 23.0.b
In limited circumstances the group-wide supervisor has discretion to determine that a group is not an IAIG even if it meets the criteria or that a group is an IAIG even if it does not meet the criteria.

​CF 23.0.b.1
If discretion has been used, then the reasons for exercising such discretion should be based on verifiable and documented quantitative and qualitative information.

​CF 23.0.b.2
Examples of situations where a group-wide supervisor may exercise discretion to determine that a group is an IAIG despite not meeting all the criteria are where:
  • an other involved supervisor requests that the group be treated as an IAIG owing to the materiality of the operations in its jurisdiction;
  • the group is expected to meet the criteria in the near future owing to mergers or acquisitions;
  • the group’s international activity or size have decreased owing to some temporary or transitory effect such as an economic shock or exchange rate fluctuations and it would not be reasonable to alter the group’s identification as an IAIG for a short period;
  • the group has related entities which are not included in the consolidated financial statements, but which are relevant to the risks of the group;
  • the group has significant off-balance sheet assets (such as funds under management held on behalf of investors) which arise from insurance operations and so are more appropriately included in the total assets when assessing the group against the size criterion;
  • the group changes or rearranges its business activities to avoid meeting the IAIG criteria including by splitting the insurance business into multiple sub-groups with separate operational controllers.

​CF 23.0.b.3
Examples of situations where a group-wide supervisor may exercise discretion to determine that a group is not an IAIG despite meeting the criteria are where:
  • the group will cease to meet the criteria in the near future owing to, for example, disposals of some or all of its insurance business;
  • the group’s international activity or size have increased owing to some temporary or transitory effect such as an economic shock or exchange rate fluctuations and it would be unreasonable to identify the group as an IAIG for a short period; and
  • the group’s business outside of the home jurisdiction exceeds 10% in aggregate but its business in any one jurisdiction outside the home jurisdiction is negligible.

​CF 23.0.c

The group-wide supervisor notifies the group of its decision to identify it as an IAIG and reasons for that decision.

​CF 23.0.d
The group-wide supervisor, in cooperation with other involved supervisors, regularly reviews previously made determinations concerning whether a group is an IAIG.

​CF 23.0.d.1
Such reviews should take place at least once every three years.

​CF 23.0.d.2
An ad hoc assessment should take place in circumstance where a significant change or event may impact the identification of a group as an IAIG.