Thursday, October 28, 2010
The legislations that regulate the
insurance sector, traditional and Takaful, in the State provided the proper
environment for the sector to continue growing despite the pressures arising
from the global financial crisis, according to executive officials in the
International Association of Insurance Supervisors (IAIS). Yoshihiro Kawai,
Secretary-General of the IAIS, affirmed yesterday that the package of
legislations and laws issued by the UAE Insurance Authority over the past two
years such as the law concerning Anti-Money Laundering and Counter Terrorism
Financing in the insurance sector and raising the minimum limit of the capital
of the insurance companies and insurance brokerage...etc. have contributed to
the continuous growth of the sector and saved it from the pressures of the
global financial crisis.
During his participation in the 17th
Annual Conference of the IAIS in Dubai, Kawai considered that adherence to the
international standards through enhancing the implementation and performance of
the continuous evaluation processes of such standards to identify the gaps,
weaknesses, and risks facing the sector contributes in establishing strong and
solid rules for a more sustainable growth in the insurance sector.
He affirmed that the legislations
that regulate the insurance sector in the UAE managed to catch up with the
significant growth of the insurance industry, traditional and Takaful. He
asserted the importance of the decision that will be issued by the IA soon to
regulate the investment of surplus in the insurance companies.
On his part, Ian Johnston, Deputy
Chief Executive and Managing Director of
Dubai Financial Services Authority, said that the IAIS is one of the most
important regulating entities that set the accounting and legal standards that
regulate the insurance industry which contributes to boosting the legislations
to reach formats that ensure protection of the sector.
He added that the IAIS members
concluded a draft that includes unified standards for controlling the insurance
sector, noting that such standards are related to the insurance companies and a
part thereof is related to the companies that provide services to the insurance
He indicated “the importance of
unifying action for the control entities worldwide”, noting that the problem
lies in controlling the huge insurance groups such as the American insurance
company AIG. He indicated that the insurance supervisory entities did not
understand the nature of functioning of the huge companies and the levels of
risk in their investments or the importance of international cooperation and
coordination with the purpose of control at the global level.
On his part, Peter Bramoler, Director
of the Insurance Companies Supervisory Authority in Vienna, asserted that the global
insurance sector has seen massive developments in the past years. He emphasized
that it is important for the accounting standards in the sector to catch up
with the changes imposed by the financial crisis which contributes in the
financial stability of the industry.
Bramoler called to establish special
departments to assess the risks in the insurance companies and the entities
that set legislations for the sector in order to achieve balance in profit
making and maintain the rights of shareholders and policyholders in the
insurance companies. He added that ignoring the organization of investments and
determination of their rates in different sectors may put the insurance companies
in hard financial situations.
He asserted the importance of
developing the legislations that regulate the insurance sector by working on
forecasting the risks surrounding the insurance companies, organizing their
investments, and performing sound assessment of their performance at the level
of insurance and investment activity.
Raed Haddadin, member of the IAIS
Executive Committee, revealed that the IAIS sub- committees issued
approximately 16 papers on money-laundering, investments, and the corporate
financial governance in addition to the standards of disclosure and transparency.
He explained that such papers will be submitted to the IAIS Executive Committee
and General Assembly next Friday for approval.
For the second day in a row of the proceedings
of the 17th Annual Conference of the IAIS which was finalized
yesterday, the participants discussed the stability of the financial system,
risk hedging policies, the best international tools and practices to address
comprehensive risks, mechanisms of functioning of the supervisory authorities, and
the definition of the international accounting standards, including those
issued in July 2010. They also tackled capital management, business models, and
the issues that emerged in the field of banking services, life insurance, and
general insurance before, during, and since the global financial crisis.
The IAIS represents about 190
jurisdictions in 140 countries and it includes over 120 professional authorities,
insurance and reinsurance institutions, and professional associations operating
in the insurance field as supervisors. The IAIS' objectives are represented in
the cooperation and contribution to improve supervision over the insurance
sector at the local and international levels in a manner to ensure maintaining
the efficiency, fairness, integrity, and stability of the insurance markets
which serves the interests of insurance policyholders and ensures their
protection, in addition to reinforcing the process of development of the insurance
markets which are regulated in a sound manner, and contributing to achieve the
financial stability worldwide.