Stakeholder Letter - Head of IAIG (2022-10-12)

Summary

This is a stakeholder letter from the BMA's Head of IAIG function responding to industry feedback on a consultation paper proposing amendments to the Insurance Act 1978 that would insert a new Section 27I. That section would set out the process for designating which entity within an Internationally Active Insurance Group (IAIG) is treated as the head of the IAIG for group supervision purposes. The letter summarises stakeholder comments and the Authority's responses, and does not itself create new binding rules.

• Designation criteria: Stakeholders asked for more detailed criteria (aligned with IAIS ComFrame) on how the head of the IAIG is identified and how 'risk to the insurance business' from non-insurance entities is assessed; the Authority will consider this when drafting future rules or guidance.
• Multiple qualifying entities: Where more than one entity could qualify as head of the IAIG (e.g. an intermediate holding company), the Authority will weigh factors such as proportion of insurance business, degree of operational control, and degree of shareholder control on a case by case basis.
• Notice and response process: Stakeholders requested formal timelines for the Authority's designation notice, the IAIG's response, and appeal rights; the Authority confirmed designation decisions will not be appealable under section 44A(1) of the Act, similar to group supervisor designation decisions, but will still allow the IAIG to submit views before a decision is made.
• Next steps: The Authority intends to finalise the wording of the proposed Act amendments in light of feedback and plans to consult separately on detailed IAIG supervision rules, expected to align closely with ComFrame.

No new obligations take effect through this letter itself; it is a consultation feedback response and signals that formal rules or guidance, and finalised legislative amendments, will follow in due course.

Applies to

Internationally Active Insurance Groups (IAIGs), insurers, insurance groups

Deadlines

• fourth quarter of 2023: The Authority intends to consult on IAIG supervision rules, expected to align closely with ComFrame.