Financial Stability Board finalises guidance on which insurers should be subject to recovery and resolution planning requirements

The Financial Stability Board has published final guidance for authorities on determining which insurers should be subject to recovery and resolution planning requirements under the Key Attributes of Effective Resolution Regimes for Financial Institutions. The guidance is intended to provide a structured and more consistent basis for deciding when individual insurers should fall within recovery and resolution planning frameworks. It sets out six criteria for assessing insurers: nature, scale, complexity, substitutability, cross-border activities, and interconnectedness. It also identifies circumstances in which recovery and resolution planning requirements should apply, including where an insurer provides a critical function or where its failure is likely to have a material impact on the jurisdiction’s financial system and or real economy. The framework is intended to align with the International Association of Insurance Supervisors’ Insurance Core Principles, while allowing flexibility for differences in market structures, legal frameworks, and supervisory practices. The guidance may also support authorities in deciding which insurers to report for the FSB’s annual list of insurers subject to resolution planning standards published in the FSB Resolution Report and on its website.