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Macroprudential supervision is aimed at identifying and, where necessary, addressing both vulnerabilities of individual insurers and the insurance sector to shocks from the external environment (inward risks) and the build-up of systemic risk at the individual insurer level or within the sector as a whole that may be transmitted to the external environment (outward risks).
This Application Paper on Macroprudential Supervision provides further guidance on the supervisory material related to macroprudential supervision in Insurance Core Principle (ICP) 24. As part of the holistic framework for the assessment and mitigation of systemic risk in the insurance sector, the IAIS revised ICP 24 to more explicitly address, among others, the build-up and transmission of systemic risk at the individual insurer and sector-wide level. The Holistic Framework and ICP 24 were adopted by the IAIS Annual General Meeting in November 2019.