Kathmandu. The International Insurance Supervisors Association has published its implementation paper on the supervision of climate-related risks in the insurance sector. The association has prepared such a letter after four extensive consultations and extensive suggestions from members and stakeholders.
Climate risks, including extreme weather events, are increasingly impacting consumers and businesses. Which has highlighted the key social objective of insurance in building resilience. Given the importance of a flexible global insurance sector with an economically sound insurer and protected insurer, the risk associated with these events needs to be properly managed by the insurer. As a result, the association stressed the need for observers to evaluate the management of such risks by the insurer.
This comprehensive letter will help supervisors effectively incorporate climate-related risks into their supervisory practices, the association said through the implementation letter, thereby strengthening the resilience of the global insurance sector.
The union’s implementation papers do not include new requirements. But it provides observers with more advice, illustrations, recommendations, or examples of good practice on how to apply the basic principles of insurance. This implementation paper replaces an earlier implementation paper published in 2021 on climate-related risks. This paper also deals with the Union’s support for multi-pronged efforts to build resilience in the insurance sector, including bridging the gap in natural disaster protection.
The implementation paper focuses on the role of regulators in climate risk assessment on the following issues:
##inline_tags_PLACEHOLDER_15#Role of supervisor in #जलवायू-based risk assessment;#
##inline_tags_PLACEHOLDER_15#integration of climate-related risks into a regulatory framework in terms of #संस्थागत good governance, risk management and internal controls;
##inline_tags_PLACEHOLDER_15#Impact of climate-related risks on #वित्तीय liability assessment and investment practice;###inline_tags_PLACEHOLDER_16#
- पर्यवेक्षकीय reporting, public disclosures and prudent micro-regulation and supervision of climate-related risks;
- सामूहिक regulatory issues; and
##inline_tags_PLACEHOLDER_15#the role of #जलवायू-related risk scenario analysis and important meditations on the impact of climate-related risk on market behavior.
Based on the union’s policy arrangements in Nepal, the Nepal Insurance Authority first issued a guideline on climate change on February 1, 2019 and directed the domestic insurers to take into account the impact of climate change in their decisions.
