FSB details resolution planning progress

At the same time, the global policy group published its first list of insurers that are subject to global standards for resolution planning, including U.S. giants American International Group Inc., MetLife Inc. and Prudential Financial Inc.; European firms AXA Group, Allianz SE, Assicurazioni Generali SpA and NN Group N.V.; five U.K.-based firms; and one Australian company. None of the large Canadian insurers were included.

“Publishing the list provides transparency to markets, policyholders and the larger public that the reported insurers and relevant authorities are working to be prepared for resolution if it ever becomes necessary,” the FSB said in a release accompanying the inaugural list.

Previously, the group published an annual list of global systemically important insurers — as it continues to do for banks — which identified companies that faced tighter regulation based on their potential to do systemic damage if they ran into trouble. However, it stopped using that approach in the global insurance sector in 2022 and committed instead to compiling a list of insurers subject to global resolution planning standards by their local regulators.

The FSB said it now plans to produce the list annually and expects the number of companies on the list to grow as regulators adopt new rules and legislation on resolution frameworks for insurers.

In the banking sector, the FSB said its work focused on examining lessons from the bank failures in early 2023 in the U.S. and Switzerland.

“This included work on public sector backstop funding mechanisms, operationalization of bail-in, and assessing the impact of technological innovation on resolution processes,” it reported.

In the year ahead, the FSB said it will continue this work and plans to explore the use of resolution tools, such as selling asset portfolios, along with promoting cross-border cooperation and information sharing among regulators.

Additionally, the FSB finalized a new global standard for winding up central counterparties (CCPs), which aims to ensure that “transparently calibrated resolution resources are available to achieve the orderly resolution of a CCP.”