This guidance was originally published in June 2016. The FSB subsequently published Guidance on the Scope of Insurers Subject to the Recovery and Resolution Planning Requirements in the FSB Key Attributes. That guidance revises the definition of a critical function, details of which are included in an explanatory note.
A resolution strategy should make it feasible to resolve an insurer while protecting vital economic functions, without severe systemic disruption or exposing taxpayers to loss, through mechanisms that make it possible for shareholders and unsecured creditors to absorb losses
This guidance should assist authorities in meeting the resolution planning requirement under the Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) and support Crisis Management Groups of global systemically important insurers in their resolution planning work. It sets out considerations for determining a preferred resolution strategy based on a strategic analysis of insurers’ business models, the criticality of insurers’ functions and policy holder protection arrangements. It also identifies a range of elements that need to be in place so that a resolution strategy can be credibly and feasibly be implemented, including effective cross-border cooperation, information systems and resources to absorb loss.
