GFIA Global Federation of Insurance Associations

The Global Federation of Insurance Associations (GFIA) has shared its views on the International Association of Insurance Supervisors’ (IAIS) draft Application Paper (AP) on Operational Resilience.

GFIA raises a number of points including:

1. Consistency: GFIA requests that the draft AP, as is the case with other existing papers, does not set new standards but provides support for implementing existing ones. Additionally, GFIA recommends that definitions, such as "operational resilience" be aligned with those used by regulators to ensure global consistency.
2. Board oversight: GFIA supports the emphasis on board oversight in operational resilience, as outlined in frameworks such as the U.S. National Association of Insurance Commissioners (NAIC) Insurance Data Security Model Law. However, GFIA also seeks clarity on how supervisors will assess the adequacy of board involvement, given the differing governance structures across firms.
3. Tailored approach: GFIA highlights the importance of a proportional approach to operational resilience, as smaller insurers may require different strategies compared to larger firms. Greater flexibility avoiding a one-size-fits-all approach would enhance the practicality of the guidance.
4. Third-party risk management: GFIA stresses the need for clearer guidance on managing risks from third-party and "nth-party" service providers. While due diligence on third parties is crucial, the paper does not adequately address the challenges of overseeing extensive subcontractor networks.
5. Scenario testing and cybersecurity: GFIA agrees with the need for scenario testing but advises that the focus should be on testing severe but plausible scenarios, as exhaustive scenario planning may be impractical

GFIA also encourages the IAIS to promote greater alignment of operational resilience standards across global regulators, fostering enhanced cooperation and interoperability. Clearer guidance on information-sharing protocols and cross-border cooperation will help insurers better navigate regulatory expectations.