Australia’s corporate and financial services regulator, The Australian Securities & Investments Commission (ASIC), has confirmed a Multilateral Memorandum of Understanding (MMoU) with the International Association of Insurance Supervisors (IAIS).
The objective of the MMoU is to create a formal basis for cooperation and information exchange between signatory authorities – made up for the most part of insurance industry regulators – regarding the supervision of insurance companies where cross-border aspects arise.
The ultimate goal of the MMoU is to promote the financial stability and sound supervision of cross-border insurance operations to ensure consumers are protected.
Through the arrangement, member parties with a legitimate interest can request and provide information on the operations of insurance companies supervised by any of the signatory authorities.
ASIC chair Joe Longo said the agreement would strengthen the regulator’s “ability to work cooperatively with other international supervisors – cooperation that is critically important to promoting effective supervision and protecting the consumers in Australia”.
According to IAIS, successful applicants for the MMoU undergo a rigorous assessment of their professional secrecy regimes and domestic confidentiality laws (benchmarked against the IAIS MMoU framework minimum standards), conducted by an independent team of IAIS members.
MMoU signatories today represent around three-quarters of global gross written premiums.
Australia’s fellow financial services regulator the Australian Prudential Regulation Authority (APRA) joined the MMoU in October 2009, soon after the first MMoU was established in June of that year.
At present, the IAIS counts 84 members as MMoU signatories. Among these include the Insurance Authority, China, Hong Kong (which joined in June 2012), Bank Negara Malaysia (joining in April 2015), the Reserve Bank of New Zealand (January 2015), the Monetary Authority of Singapore (June 2010), the UK’s Financial Conduct Authority (June 2012) and Prudential Regulation Authority (June 2012).
The IAIS, formed in 1994, is a voluntary membership organisation of insurance supervisors and regulators from more than 200 jurisdictions, with responsibility for developing principles, standards and other supporting material for the supervision of the insurance sector.
A core mission of the IAIS is to promote effective and globally consistent supervision of the insurance sector, ensuring, it says, “fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to global financial stability”.
