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Consumers must not pay for regulation: IAIS

Regulators must ensure the cost of supervision is not passed to policyholders, the International Association of Insurance Supervisors (IAIS) says.

“When we contemplate how to advance financial inclusion, it is critical it not come at the cost of policyholder protection,” Implementation Committee Chairman Jonathan Dixon told a meeting in the Netherlands.

“We must work with supervisors to identify ways we can enhance access while ensuring effective supervision and maintaining high levels of policyholder protection.”

Mr Dixon, an executive on the South African Financial Services Board, says regulators must understand how insurance core principles can be applied “in a manner appropriate to the nature, scale and complexity of the entities being supervised”.

“It is not possible to advise each supervisor on their unique situations,” he said.

“A more effective intervention for the IAIS is providing supervisors with tools to develop the knowledge, skills and expertise they need to implement international standards in a way that does not create undue impediments, thereby increasing insurance penetration.”

To achieve this the association will work with the World Bank, the International Monetary Fund and the Bank for International Settlements’ Financial Stability Institute.

Another area the IAIS must respond to is mobile technology, Mr Dixon says.

“Supervisors are facing ever-increasing and innovative challenges to the traditional silos of financial services,” he said.

“It is imperative that we acknowledge these challenges and work together on the most appropriate solutions that foster increased access while protecting consumers.”