Public consultation on draft Issues Paper on structural shifts in the life insurance sector
Comments due by Monday, 19 May 2025 24:00 CEST
Background information
Over the past years, the IAIS has closely monitored structural shifts within the life insurance sector identified through its Global Monitoring Exercise (GME).
A primary focus has been the insurance sector’s increasing allocation to alternative assets and the rising adoption of cross-border asset-intensive reinsurance (AIR). These trends were driven in part by the prolonged low-interest rate environment in several regions, prompting insurers to seek higher yields and move away from capital-intensive products. However, these trends have persisted in an environment of higher interest rates.
The primary objective of this Issues Paper is to provide a comprehensive analysis of these structural shifts. It explores these emerging trends in greater detail, provides a framework for understanding macroprudential and financial stability implications and identifies potential areas for enhancement in the IAIS supervisory material.
More specifically, the main focus areas for this Issues Paper are:
- Alternative assets:
- Defining alternative assets, using principles and criteria to classify these investments;
- Understanding current trends in alternative assets and the drivers behind this trend; and
- Evaluation of issues such as hidden leverage, liquidity risks, credit risk and credit ratings, as well as regulatory capital-related issues associated with alternative assets.
- AIR:
- Gaining a better understanding of AIR;
- Understanding how jurisdictional differences in reserving, capital requirements and investment flexibility are driving the rise in AIR activity; and
- Summarising supervisory risk assessments and corresponding supervisory responses to these risks.
- Macroprudential and financial stability considerations:
- Outlining macroprudential considerations, interconnectedness with broader markets and financial stability risks.
- Review of IAIS supervisory material:
- Identifying potential areas for enhancement in the IAIS supervisory material to effectively regulate and supervise the risks identified around these structural shifts.
Consultation
This public consultation includes questions that seek views on the work done by the IAIS on these structural shifts in life insurance to date and further work that stakeholders believe the IAIS should undertake. All consultation questions are optional, so stakeholders may comment only on a subset of questions.
Feedback on the documents is invited by 19 May 2025 24:00 CEST. After this deadline, the consultation tool will be closed and it will no longer be possible to submit comments.
A public background session webinar will be held on 3 April 2025, 13:00 – 14:30 CEST to present the draft Issues Paper and answer any questions from stakeholders. Click here for details and registration.
How to provide feedback:
The consultation is now open. Please use the consultation tool available at this link to provide your comments. Instructions for use are available when you access the tool. Only comments submitted through the tool will be considered. All comments will be published on the IAIS website unless the option in the tool to keep comments confidential is chosen.
Please note that some formatting (eg bullet points) may not be preserved when copying and pasting your comments into the consultation tool from other software such as Microsoft Word.