ICP 13 Reinsurance and Other Forms of Risk Transfer

The supervisor requires the insurer to manage effectively its use of reinsurance and other forms of risk transfer. The supervisor takes into account the nature of reinsurance business when supervising reinsurers based in its jurisdiction.

13.1
The supervisor requires ceding insurers to have a reinsurance programme that is appropriate to their business and part of their overall risk and capital management strategies.


13.2

The supervisor requires ceding insurers to establish effective internal controls over the implementation of their reinsurance programme.


13.3

The supervisor requires ceding insurers to demonstrate the economic impact of the risk transfer originating from their reinsurance contracts.


13.4
When supervising ceding insurers purchasing reinsurance across borders, the supervisor takes into account the supervision performed in the jurisdiction of the reinsurer.


13.5
The supervisor requires the ceding insurer to consider the impact of its reinsurance programme in its liquidity management.


13.6

In jurisdictions that permit risk transfer to the capital markets, the supervisor understands and assesses the structure and operation of such risk transfer arrangements, and addresses any issues that may arise.