The IAIS has published a public consultation on the reviewed text of Insurance Core Principle 17 regarding capital adequacy. In an earlier consultation on its approach to climate risk in the ICPs, Finance Watch had already urged the IAIS to ensure their guidance evolves with the current time and deals with the challenge of climate change.
Given the forward-looking and non-linear nature of climate risks, it is essential to tackle them from a prudential perspective in order to ensure the stability of the financial system in the long term. As such, climate risk must be added explicitly to the guidance as an integral part of capital requirements measures.
In the response, Finance Watch reiterates its previous ask for a precautionary approach to be embedded explicitly into ICP 17.