ICP 1 Objectives, Powers and Responsibilities of the Supervisor

Each authority responsible for insurance supervision, its powers and the objectives of insurance supervision are clearly defined.

1.1

Primary legislation clearly defines the authority (or authorities) responsible for insurance supervision.


1.2
Primary legislation clearly determines the objectives of insurance supervision and these include at least to:
  • protect policyholders;
  • promote the maintenance of a fair, safe and stable insurance market; and
  • contribute to financial stability.

1.2.1    

The precise supervisory objectives and their respective priority may vary by jurisdiction depending on the level of development of the insurance markets, market conditions and consumers. Supervisory objectives could also include promoting insurance market development, financial inclusion, financial consumer education, and contributing to fighting financial crime 

1.2.2    

The policyholders to be considered in defining supervisory objectives include past, present and future policyholders.

1.2.3    

Depending on the evolution of the jurisdiction’s insurance or financial markets, the supervisor may emphasise temporarily one or more of the objectives. Regardless, the supervisor should take into account the other objectives in fulfilling its function. In such circumstances, this should be explained to stakeholders, including insurance industry participants, consumers and the general public.

1.3

Primary legislation gives the supervisor adequate powers to meet its responsibilities and objectives.

 


1.3.1    

Primary legislation should give the supervisor the necessary powers to achieve its responsibilities and objectives, and the ability to take supervisory action adequately. The supervisor should have the powers needed to implement a framework for effective insurance supervision, which is described by the ICPs in general.

1.3.2    

Legislation should clearly address insurance legal entity and group-wide supervision, providing the supervisor with sufficient powers to achieve the respective responsibilities and objectives.

1.3.3    
The supervisor should have sufficient powers in place to perform the role of a group-wide supervisor, including coordination and collaboration with other relevant supervisors. Additionally, the legislation should empower the supervisor of an insurance legal entity which is part of a group to contribute to the supervision of that group on a group-wide basis

1.4

The supervisor initiates or proposes changes in legislation where current responsibilities, objectives or powers are not sufficient to meet the intended supervisory outcomes.