2016年-FSB全球金融稳定委员会_Public_responses_to_the_November_2015_consultative_document_‘Developing_Effective_Resolution_Strategies_and_Plans_for_Systemically_Important_Insurers_3页_215kb

AIA Group Limited Comments on FSB Consultation Paper on Resolution Strategies for Systemically Important Insurers

Overview

AIA Group Limited, a leading insurance company based in Hong Kong, has provided detailed comments on the Financial Stability Board's (FSB) consultation paper titled "Developing Effective Resolution Strategies and Plans for Systemically Important Insurers," published on 3 November 2015. Although AIA is not classified as a globally systemically important insurer (G-SII), it emphasizes the importance of the recommendations in the context of its operations across 16 Asia Pacific jurisdictions. AIA believes that the proposed measures should be practical, proportionate, and aligned with the actual needs of the insurance sector rather than theoretical assumptions.

Core Content

AIA Group Limited's comments focus on the following key areas:

1. Objectives of Resolution Strategies

• AIA supports the development of effective and proportionate regulatory and supervisory measures aimed at enhancing financial stability.
• It acknowledges the importance of reducing systemic risk and promoting transparency in the financial system.
• Insurers, while not as high-risk as banks, play a vital role in financial markets and society as risk absorbers and investors. Therefore, they should benefit from greater stability and support for economic growth.
• AIA warns against the potential for radical reforms to cause disproportionate and unintended consequences, especially in Asia, where the insurance sector is critical to economic development.

2. Determination of a Preferred Strategy

• AIA believes that the preferred resolution strategy should not be overly bank-centric and should be tailored to the insurance sector.
• It emphasizes that the insurance industry has existing resolution tools (e.g., run-off and transfer of business) that are sufficient for most scenarios.
• AIA suggests that expanded resolution powers such as the creation of a bridge insurer or bail-in should only be used as a last resort, after traditional tools have been exhausted and found insufficient.
• It stresses the need for safeguards to ensure that resolution measures are equitable and do not lead to unintended consequences, particularly in terms of legal protections and independent valuations.

3. Strategic Analysis for Resolution Strategy Development

• AIA agrees that resolution strategies should be customized to the specific risks of each insurer.
• It highlights that life insurance products are generally highly substitutable, meaning that policyholders can often transfer their coverage to other insurers without significant disruption.
• Therefore, the likely resolution tools would be run-off or transfer of business, with expanded powers reserved for exceptional cases.
• AIA supports the improved definition of "critical function," noting that traditional life insurers are unlikely to trigger a critical function failure that would impact the financial system significantly.
• It advocates for a local entity approach to solvency rather than a consolidated one, due to potential conflicts between local and group-wide interests in cross-border operations.

Operational Considerations

• AIA recommends that any requirements to improve resolvability must be based on rigorous analysis and justification, taking into account the costs and undesired outcomes, especially for other jurisdictions.
• It supports the inclusion of an appeals mechanism, potentially involving courts, to ensure fairness and equity in resolution plans.
• AIA emphasizes the importance of protecting non-public company information and believes that legal frameworks should prohibit its disclosure unless agreed by the recipient and the relevant authority.
• AIA underscores that a resolution regime must be integrated with the existing regulatory framework, with solvency and responsible behavior remaining central to oversight.

Conclusion

AIA Group Limited calls for a balanced and practical approach to developing resolution strategies for insurers, ensuring that they are proportionate, effective, and aligned with the realities of the insurance sector. It also highlights the need for cross-border cooperation and legal safeguards to protect policyholders and maintain financial stability in the Asia Pacific region.