The International Association of Insurance Supervisors (IAIS) has issued recommendations on the supervision of climate-related risks in the insurance sector. The paper noted the increasing impact of climate change, including extreme weather events, highlighting the subsequent need for a “resilient global insurance sector”, with supervisors able to effectively assess insurers’ management of such risks. The application paper has outlined good practices and guidance for supervisors across several areas, including the integration of climate-related risks into supervisory frameworks with respect to corporate governance, risk management and internal controls. In addition, the paper considers the impact of climate-related risks on valuation and investment practices, supervisory reporting, and climate-related scenario analysis. The IAIS pointed to its support for multi-party efforts to shore up resilience in the sector, including work addressing natural catastrophe protection gaps. The IAIS is a global standard-setting body looking to promote effective and globally consistent supervision of the insurance industry and contribute to global financial stability.
