Treatment of Credit Insurance in Banking Rules

The relationship between credit insurance and banking is an important and growing one. Banks value the protection credit insurance provides to their clients against non-payment risk, as well as the resulting capital relief banks gain from this. While credit insurance is a recognised credit risk mitigation technique under Basel rules, its treatment in banking regimes around the world does not always recognise its security, nor its value to banks.

ICISA seeks to inform the public debate about the role of credit insurance in banking and its value to banks as a Credit Risk Mitigation technique. To achieve this we work independently and in partnership with other associations to provide evidence and analysis about how the product works, the security and strength of the sector, and the work of our members in supporting financing around the world.

As rules for banks evolve with the implementation of Basel IV around the world, ICISA engages closely with regulators in the EU and elsewhere to ensure that credit insurance is appropriately recognised within regimes. Our efforts in this area have included:

• demonstrating the stability of the credit insurance sector under the Solvency II regime;
• advocating for improvements in the treatment of credit insurance as a CRM within EU rules; and,
• contributing to wider industry efforts to demonstrate the key role credit insurance plays within important parts of the banking sector

For more information in our work in this area, contact Daniel de Burca.