The Joint Forum was developed in 1996 for the regulators of banking, securities and insurance to address cross-sectoral issues that are common among the three financial sectors. The Joint Forum comprises the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commission (IOSCO), and the International Association of Insurance Supervisors (IAIS), each of whom have an equal number of senior supervisors representing each supervisory constituency. Representatives of all three sectors from 13 countries are represented at present in the Joint Forum which includes: Australia, Belgium, Canada, Denmark, France, Germany, Italy, Japan, Netherlands, Spain, Switzerland, United Kingdom and United States. Membership is currently being expanded during 2012, with the addition of three new members underway, one from each sector.
Each member sends one representative to the Joint Forum Plenary meetings, which usually happen three times per year. The NAIC represents U.S. prudential insurance regulators at Joint Forum meetings (NAIC President and Florida Insurance Commissioner Kevin McCarty is the U.S. delegate at these meetings). Chairmanship of the Joint Forum rotates between the three parent sector committees and is elected by the relevant parent committee and named for a two-year term. NAIC’s chief executive officer, Dr. Therese (Terri) M. Vaughan, was elected by the IAIS and recently appointed the chair of the Joint Forum for the current IAIS rotation. Dr. Vaughan will serve a two-year term effective Jan 1, 2012.
Dr. Vaughan’s appointment as chair of the Joint Forum comes at a key time. The global financial crisis drew increased attention to the need for cooperative efforts to improve international regulatory standards. All three sectors have made and are continuing to make efforts to address issues arising from the global financial crisis. In this respect, the Joint Forum’s Differentiated Nature and Scope of Financial Regulation (DNSR) report (January 2009) remains a key work product. While much has already been accomplished based on the recommendations therein, further enhancement of cross-sector communication and cooperation is expected in the future. At the NAIC, the solvency modernization initiative is taking into account the work of the joint forum including specifically the DNSR.
The Joint Forum coordinates the work of international financial standard setters; but it does not have the power to pass regulations. It can, however, make strong recommendations, and these are often adopted by member nations, as well as other countries with an interest in following the latest standards in the financial industry. In addition to releasing cross-sectoral reports, the Joint Forum develops guidance, principles and identifies best practices that are of mutual interest to all three supervisory standard setters. In December 2011, the Joint Forum issued a consultative report that proposes principles for supervising financial conglomerates. The proposed principles, which revise the Joint Forum's 1999 principles, strongly inter-relate with the IAIS ComFrame (Common Framework for the Supervision of Internationally Active Insurance Groups) project and the group supervision work undertaken by the NAIC.
The NAIC's International Insurance Relations (G) Committee (“Committee”) supports the work of the Joint Forum by attending meetings to represent the views of U.S. insurance regulators in discussions of issues of significance to insurance commissioners, and by commenting on guidance and principles papers of common interest. The Committee reports the developments of the Joint Forum at NAIC National Meetings.
During 2012, the Joint Forum Risk Assessment and Capital working group will be working on reports regarding the cross sectoral aspects of mortgage insurance, point of sale disclosure, and the new and growing market in longevity risk transfer. NAIC staff help support all these work streams, and a senior NAIC staff member is leading the work stream on mortgage insurance.
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