Canadian Life and Health Insurance Association Inc.

INIA Joint Letter on IAIS Branching Questionnaire and Survey Methodology

Release Date: 03/14/2012
Staff Reference: Janice Hilchie

March 14, 2012

Kwan Jung
International Association of Insurance Supervisors
c/o Bank for International Settlements
CH-4002 Basel, Switzerland


Dear Kwan Jung:

On behalf of the undersigned national and regional insurance associations we are following up on our January 5th letter regarding the “Survey on Supervision of Cross-Border Operations through Branches”. Our intent then and now is to be helpful and constructive in our engagement on this specific questionnaire and on the broader process questions we raised regarding other future IAIS industry surveys. We would like to take this opportunity to share our perspectives with you on both these matters. We wish the IAIS to be successful in achieving its core mission in ways which are both efficient and effective, while at the same time respectful of our national insurance and corporate oversight regimes.

We understand that the Subcommittee has directed the survey (excluding the Observer questions) to IAIS member regulators. Having further reviewed the questionnaire, we are confirmed in our belief that this is the logical approach that should provide the working group with the insights necessary to proceed with the drafting of the Issues Paper on the Supervision of Cross-Border Operations through Branches. In proceeding with their work on insurance branches, we urge the Subcommittee not to overlook the benefits of business conducted via this route, such as access to home office capital and the greater ability of the company to manage its operations, protect its reputation and assure a high level of service. We also note that the ability to operate through branches or subsidiaries is strongly protected under the GATS.

Following the receipt and analysis of the results of the regulator survey, we believe you will be in a better position to assess the need for Observer directed questions. Nonetheless, to the extent that the Subcommittee feels compelled to go forward with the Observer questionnaire, we would offer the following comments:
    i) Observer question 1
        a) No comment or suggested edit(s).
    ii) Observer question 1.1
        a) Delete the column on subsidiaries.
        b) Why are some regions omitted; e.g. South America, the Middle East, Europe within the EEA?
        c) What is meant by Asia Pacific, the IAIS definition may not match a group's definition?
    iii) Observer question 2
        a) Delete the question. The responses will require reference to proprietary business information; further any responses to the "pro and cons" will be highly subjective.
    iv) Observer question 3
        a) Delete the question. The responses will require reference to proprietary business information.
    v) Observer question 4
        a) This question seems best answered by supervisors.
    vi) Observer question 5
        a) The question is not clear. What constitutes a "stressed situation"? What is meant by "observed"? Does "required to" include by statute/legislation, supervisory order? Does it include dividends paid to the parent?
        b) Given the subjectivity in responding we would recommend deleting the question.
    vii) Observer question 6
        a) This question requires a subjective response and answers will not be easily comparable.
    viii) Observer question 7
        a) No comment or suggested edit(s).

We recognize that the IAIS needs to seek information from its constituents to assist in policy formulation and on organizational and program development and we welcome and appreciate the IAIS seeking out the industries views. This being the case, we would be interested in knowing if the IAIS has a set process and methodology for carrying out member and/or observer surveys; and, if not, whether consideration would be given by the IAIS Executive and Technical Committees towards establishing a consistent and reasonable process going forward.

In addition, we would ask that the IAIS provide some clarification on confidentiality and proprietary information issues vis-à-vis the survey process. For the benefit of Observers it would be helpful to know what the distinction is between a data call and a questionnaire in terms of the process and participants. Furthermore, under what circumstances, if any, do questionnaires need to be funneled through the jurisdictional supervisor?

In order to ensure transparency, Observers would urge the IAIS to reach out to all Observers who are members of the relevant committee(s) when seeking input in policy formulation. Simply put, we would ask that the IAIS consult all relevant Observers when gathering information on the industry.

We thank you for the opportunity to provide feedback and we look forward to hearing from you.


American Council of Life Insurers (ACLI)
Association of Bermuda Insurers and Reinsurers (ABIR)
American Insurance Association (AIA)
Association of British Insurers (ABI)
Canadian Life and Health Insurance Association (CLHIA)
German Insurance Association (GDV)
Insurance Bureau of Canada (IBC)
Insurance Council of Australia (ICA)
Insurance Europe
Property Casualty Insurers Association of America (PCI)
Reinsurance Association of America (RAA)
South African Insurance Association (SAIA)

cc: Shinya Kobayashi, Japan Financial Services Authority
Peter Braumüller, Chair IAIS Executive Committee
Monica Mächler, Chair IAIS Technical Committee
Lance Leatherbarrow, IAIS Secretariat