7 th OECD-IAIS-ASSAL Conference on Insurance Regulation and Supervision in Latin America. Lisbon, April 2006

Transcription

1 DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS 7 th OECD-IAIS-ASSAL Conference on Insurance Regulation and Supervision in Latin America Lisbon, April 2006 SUMMARY RECORD

2 SUMMARY RECORD OF THE 7 TH OECD-IAIS-ASSAL CONFERENCE ON INSURANCE REGULATION AND SUPERVISION IN LATIN AMERICA LISBON, APRIL Overview The 7 th OECD-IAIS-ASSAL Conference on Insurance Regulation and Supervision in Latin America was held in Lisbon, Portugal on April 2006 in cooperation with the local sponsor ISP (Instituto de Seguros de Portugal), ASSAL (Association of Latin American Insurance Supervisors) and IAIS (International Association of Insurance Supervisors). (ASSAL consists of 19 members including Portugal and Spain.) This conference was held on the occasion of the 17 th Annual Meeting of ASSAL and preceded the ASSAL-IAIS Training Seminar on insurance supervision. The conference was attended by about 50 participants consisting of ASSAL members (including some senior level supervisors), OECD and IAIS representatives as well as the private sector, and was opened by the Portuguese State Secretary of the Treasury and Finance, Mr. Pina. Mr. Schneiter, Chair of the IPPC, represented the OECD, introducing the OECD and the activities of the IPPC in the opening session, while Ms. Messy and Messrs. Monti, Antolin, and Kawakami from the Secretariat attended the conference, with the first three speaking/moderating on Financial Education, Catastrophe Risk and Insurance Hurricane and Hydrometeorological Risks and The Effects of Ageing on Insurance 1 (See draft agenda in Annex 2). 2. Financial education In the Financial Education panel, Ms. Messy introduced the OECD s Financial Education project in general (The OECD 2005 publication on Improving Financial Literacy was distributed to the participants during this panel), and some particular challenges in the insurance sector, such as consumers lack of awareness of their risk exposure and of the protection provided by insurance, the complexity and variety of insurance products and regulation. She then stressed that the main insurance stakeholders including industry, government, NGOs and consumers all have but various roles to play in promoting and improving financial literacy in this sector. She also presented several policy options to enhance financial education in the insurance sector involving instruction, quality information and objective advices and sketched out the experiences of some OECD countries in this respect. She lastly presented OECD ongoing work on this issue (draft report and good practices on financial education in the insurance sector). Mr. Mundy of the UK FSA presented the UK experience where the FSA, with encouragement and cooperation from its CEO and various stakeholders, was able to put together a comprehensive strategy utilizing not only its website, but also consumer publications and campaigns to raise awareness. Currently, its National Strategy for Financial Capability focuses on 7 projects, benefiting from the inputs of its 1. Presentations are available on the OECD website: 2

3 Advisory Group consisting of important stakeholders such as employers, families, retired people, and schools. Mr. De Oliveira Garcia of the Brazilian SUSEP gave an overview of the Brazilian experience about macroeconomic stabilization of which pension reform was a major component, and about financial education in Brazil which is gaining importance as the government tries to promote open private pension systems and to develop risk coverage for the bulk of workers in the informal sector. In the discussion that followed, many questions were asked about the UK experience, which provides a relevant experience for other OECD and emerging economies to follow in terms of a national strategy integrating various stakeholders. 3. Catastrophe Risk and Insurance In the panel on Catastrophe Risk and Insurance Hurricane and Hydrometeorological Risks, which is in fact a continuation from last year, Professor Monti of Bocconi University, as the moderator, gave an introductory remark framing the main issues and drawing the attention of the audience to the challenges posed by the changing risk scenario. In particular, he provided an update about the record hurricanes in North America and storms and floods in Europe since the last meeting in Bolivia in March 2005, focusing on the impact of climate change and on the increasing exposure and vulnerability of assets at risk. With a view to reducing the total cost of natural disasters, Professor Monti also stressed the importance of public risk awareness, structural and non structural risk mitigation measures, as well as crisis management strategies. He also presented the recent OECD activities in the field of catastrophe risks and insurance, with a special emphasis on the International Network on the Financial Management of Large Scale Catastrophes. Mr. Perdomo of the Dominican Republic presented the experiences in his country, which is very prone to hurricane damage being located in the middle of the Caribbean Sea. Dr. Aschenbrenner-von Dahlen of the German Bafin emphasized the role of the international reinsurance market in this context, with a mini-case-study of supervisory issues relating to diversifying and reinsuring catastrophe risks, such as the main advantages and disadvantages of quota share, excess-of- loss and stop-loss reinsurance arrangements to cover catastrophic exposures, stressing the need to monitor the quality of reinsurers. The ensuing discussions centered on ASSAL member experiences (Peru, Mexico and Colombia) in estimating PMLs (Probable Maximum Losses) of catastrophes. (While Professsor Crichton of University College, London, was unable to make his presentation due to sudden illness, his interesting paper and presentation on Hurricane and Hydrometeorological Risks and Insurance Coverage was circulated to the participants.) 4. Effects of Ageing on Insurance In the panel on The Effects of Ageing on Insurance, Professor Alves of the ISP presented some Portuguese mortality projections for life annuities and emphasized the effects of ageing not only on the pricing of insurance contracts, but also the valuation of provisions and solvency requirements, and argued that it was important for insurers to take pro-active attitudes to diversify the risk so as to remain competitive. Mr. Tempe of the French CCAmip then provided an overview of the consequences on the insurance sector of demographic changes in Europe and presented the French experience in this respect. He particularly emphasized that the growth of the elderly population owing to low birth rates and increased life expectancy in Europe combined with declining welfare budgets implied in principle new opportunities for particular branches of the insurance sector (e.g. private health insurance products such as long-term care, pension plans and annuities). As regards to the French experience, he first stressed that the 3

4 development of LTC premiums was still marginal. Yet, the growth of annuity products seems more significant even though the pricing of these products remains challenging for insurance companies. In the last presentation, Mr. Antolin of the OECD showed how un-expected improvements in life expectancy (i.e. longevity risk) affect insurance through its impact of lifetime annuity products. In this regard, he showed that unexpected improvements of one year per decade in life expectancy could increase pension fund liabilities by around 7-8%, well above acceptable margins of risk. Furthermore, he reported that pension funds and insurance companies do not seem to fully account for improvements in life expectancy nor do it in a standard and consistent fashion. He summed up his presentations suggesting some ways forward: standard methodology, stochastic approach, and changes in the regulatory framework. 5. Others In addition to the issues mentioned above, the conference discussed Finite Reinsurance, which has been a very controversial issue globally in insurance markets since the abuse of these instruments that were uncovered in the US 2 years ago. Mr. Rivera of the Puerto Rico Insurance Commissioner s Office highlighted the accounting aspects of this issue, while Dr. Aschenbrenner-von Dahlen of the German Bafin gave an overview of the IAIS report on this issue. In the ensuing discussions, it was generally agreed that, on one hand, a review of existing supervisory systems and multi-disciplinary inspections on the supervisory front, along with increased transparency and disclosure from the industry side on the other, were needed to properly evaluate and assess these complex instruments. The next meeting is scheduled to be held in Brazil around May-June

5 ANNEX 1: LIST OF PARTICIPANTS PRESENT: Mr. SOLLITTO Mr. BAELO Mr. FERNÁNDEZ Mr. ROSA Mr. JÁUREGUI Mr. GARCIA JUNIOR Ms. LARRAIN Mr. CLAUDE Mr. MACÍAS Ms. VILLATE Mr. PERDOMO Mr. SÁNCHEZ Mr. CALDERÓN Mr. CHIRIBOGA Mr. MONTENEGRO Mr. TEMPÉ Mr. WEISS Mr. ASCHENBRENNER VON DAHLEN Mr. ZAPATA Mr. JEREZ Mr. AGUILAR Mr. LÓPEZ Mr. GARCÍA Mr. BENITEZ GIMENEZ Ms. CABREJO Mr. LEÃO MARTINHO Mr. OSÓRIO Mr. PINHEIRO RAMOS Mr. CORA Mr. RIVERA Ms. DUQUE Mr. LOZANO Ms. RAMIREZ Mr. KAWAI Mr. OKUBO Mr. SCHNEITER Mr. MUNDY Mr. CHEN Mr. POTTER Ms. ACOSTA Y LARA Mr. TORRES URBINA Argentina Argentina Argentina Argentina Bolivia Brazil Chile Chile Chile Colombia Dominican Republic Dominican Republic Ecuador Ecuador El Salvador France France Germany Guatemala Honduras Mexico Mexico Panama Paraguay Peru Portugal Portugal Portugal Puerto Rico Puerto Rico Spain Spain Spain Switzerland Switzerland Switzerland United Kingdom United Kingdom United States Uruguay Venezuela 5

6 OECD: Mr. KAWAKAMI Ms. MESSY Mr. MONTI Mr. ANTOLIN Directorate for Financial and Enterprise Affairs Directorate for Financial and Enterprise Affairs Directorate for Financial and Enterprise Affairs Directorate for Financial and Enterprise Affairs 6

7 ANNEX 2: AGENDA ASSAL XVII Annual Meeting VII Conference on Insurance Regulation and Supervision in Latin America Lisbon, Portugal. April 24-28, 2006 Organised by the Association of Latin American Insurance Supervisors (ASSAL), The International Association of Insurance Supervisors (IAIS), The Organisation for Economic Co-operation and Development (OECD), and The Portuguese Insurance Institute (ISP) Final Programme Monday April 24, 2006 XVII ASSAL Annual Conference Time Items / Topics to be covered Participants 08:00-08:30 Registration All in assistance 08:30-09:00 09:00-11:00 11:00-11:15 11:15-12:45 12:45-13:45 13:45-15:00 Opening Remarks by Rui Leão Martinho, President of the Portuguese Insurance Institute and ASSAL Annual Conference Chairman. Opening Remarks by Ana María Acosta y Lara, Superintendent of SSR of Uruguay and ASSAL Ex-Co Chairman. ASSAL Committee Meetings Coffee break ASSAL Plenary Session, 1 st Part: Corporative affairs. [Agenda to be circulated by ASSAL Secretariat] ASSAL Plenary Session, 2 nd Part: Discussion on common interest issues. [Agenda to be circulated by ASSAL Secretariat] Lunch Closed Session: ASSAL Members Only. 7

8 15:00 15:10 15:10 15:20 15:20 15:30 15:30 15:40 15:40 16:10 16:10 16:40 16:40 17:00 17:00 17:30 17:30 18:00 OECD IAIS ASSAL VII Conference on Insurance Regulation and Supervision in Latin America Opening Remarks by Rui Leão Martinho, President of the Portuguese Insurance Institute and ASSAL Annual Conference Chairman. Introduction to ASSAL activities by Ana María Acosta y Lara, Superintendent of SSR of Uruguay and ASSAL Ex-Co Chairman. Introduction to IAIS activities by Yoshihiro Kawai, IAIS Secretary General. Introduction to OECD activities by Kurt Schneiter, Chairperson of the OECD Insurance and Private Pensions Committee. Panel 1 on Financial Education Flore-Anne Messy (OECD) René de Oliveira Garcia Junior, SUSEP, Brazil (ASSAL) Coffee break Shaun Mundy, FSA, UK ( IAIS) Moderator: Kurt Schneiter (OECD) 19:00-21:00 Dinner sponsored by APS Tuesday April 25, 2006 Portuguese National Holiday in commemoration of 25 April, 1974, the Carnation Revolution 09:00 - Lisbon City Tour 17:00 09:00-09:30 09:30-10:00 Wednesday April 26, 2006 Panel 2 on Finite Reinsurance Roberto Jeréz, CNBS, Honduras (ASSAL) Sebastian Aschenbrenner-von Dahlen, BaFin, Germany (IAIS) 8

9 10:00 10:30 10:30-11:00 Edward Rivera Maldonado - Puerto Rico Insurance Commission (OECD) Moderator: Yoshihiro Kawai, Secretary General (IAIS) 11:00-11:30 Coffee break Panel 3 on Catastrophic Risk and Insurance. Hurricane and hydrometeorological risks. 11:30 - Introductory remarks by Alberto Monti (OECD) 12:00 12:00-12:30 12:30 13:00 13:00-13:30 13:30-15:30 Castulo Virgilio Perdomo, SS, Rep. Dominicana (ASSAL) Sebastian Aschenbrenner-von Dahlen, BaFin, Germany (IAIS) Moderator: Alberto Monti (OECD) Lunch at Meridien Lisbon Hotel Working Lunch ASSAL- FIDES ASSAL Ex-Co Members and FIDES 9

10 Panel 4 on The effects of Aging on Insurance 15:30-16:00 16:00-16:30 16:30 17:00 17:00 17:15 17:15 17:45 18:00 19:30 Dr. Francisco Cruz Alves, ISP, Portugal François Tempé, CCAmip, France (IAIS) Pablo Antolin (OECD) Coffee break Moderator: Pedro Aguilar Beltrán, CNSF, México (ASSAL) Presentation by Dirección General de Seguros y Fondos de Pensiones de España ASSAL/FIDES/IDB members Thursday, April 27, 2006 IAIS-ASSAL Training Seminar Opening Remarks IAIS ASSAL Training Seminar Speech by Ana María Acosta y Lara, Superintendent of SSR of Uruguay and ASSAL Ex-Co Chairman 08:30-09:00 Speech by Yoshihiro Kawai, IAIS Secretary General. Panel on Liabilities, Technical Reserves, Sufficiency Analysis and Security Margins 09:00-09:30 Dr. Hugo Borginho, ISP, Portugal 09:30-10:00 Speaker from SSN, Argentina (ASSAL) 10:00-10:30 François Tempé, CCAmip, France (IAIS) 10:30-11:00 Moderator: : Laura Duque, DGSFP, Spain (ASSAL) 11:00-11:15 Coffee break Panel on Agricultural Insurance 11:15-11:45 Osvaldo Macias, SVS, Chile (ASSAL) 11:45-12:15 Ricardo Lozano, DGSFP, Spain (ASSAL) 12:15-12:45 12:45-13:15 Dirk Witteveen, De Nederlandsche Bank, Netherlands (IAIS) Moderator: Luis Armando Montenegro, SSF, El Salvador (ASSAL) 10

11 13:15-15:00 Lunch Workshop on ICP 19 (Insurance Activity) (Part 1) 15:00-17:00 Coordinator: Pedro Aguilar Beltrán, CNSF, Mexico 17:00-17:30 Coffee break 17:30 19:00 Workshop on ICP 19 (Insurance Activity) (Part 2) Coordinator: Pedro Aguilar Beltrán, CNSF, Mexico 11

12 Friday April 28, 2006 Panel on Implementation of Insurance Core Principles and FSAP Evaluations. (ASSAL members recent experiences) 09:00-09:15 Ricardo Lozano, DGSFP, Spain 09:15-09:30 Ricardo E. García, SSRP, Panama 09:30-09:45 Dr. Gabriel Bernardino, ISP, Portugal 09:45-10:00 José López Hoyo, CNSF, México 10:00-10:15 Ana María Acosta y Lara, SSR, Uruguay 10:15 11:00 Moderator: Yoshihiro Kawai (IAIS) 11:00-11:15 Coffee break IAIS Case Study (Change in control), by Makoto Okubo 11:15 13:15 IAIS Case Study (Change in control) Part I 13:45 15:00 Lunch 15:00-17:00 IAIS Case Study (Change in control) Part II 17:00 17:30 Closing and Recognitions 20:00 22:30 Closing Dinner 12