Principles of Insurance Risk SupervisionFederal Reserve System Courses

Type of Participant Targeted
This course is designed for safety-and-soundness examiners and other supervisory staff with some knowledge of insurance products and the fundamentals of insurance risk supervision.

Prerequisites
None.

Course Overview
Designed as a supplementary course for safety-and-soundness examiners and other bank supervisory staff, this 4½-day course provides examiners with the tools to better understand and analyze products and processes with an insurance component. The course also covers the use of insurance products as part of a broader enterprise-wide risk management strategy and provides an overview of key and unique risk management issues raised as a financial institution conducts insurance and annuity product sales or underwriting activities. The course will also enhance examiner skills necessary to complete risk assessments of activities in which insurance risk is embedded. Insurance concepts and terminology as well as types of insurance products, industry participants, lines of business, operations, and regulation will be covered. A pre-course reading assignment must be completed prior to attendance.

Course Objectives

By the end of this 4½-day course, participants will, at a minimum, be able to

• Provide an overview of the U.S. insurance industry and its participants
• Explain insurance risk management
• Describe the insurance business and its operations
• Define insurance and annuity products
• Explain key insurance concepts and contract characteristics
• Review financial statements of insurers
• Explain insurance industry regulation within the United States
• Describe supervisory coordination among regulators
• Identify unique risks associated with various types of underwriting
• Explain why anti-money-laundering requirements have expanded to include insurers
• Describe categories and characteristics of corporate-owned life insurance (COLI) and bank-owned life insurance (BOLI)
• Explain insurance and annuity sales activity authority of U.S., state, and federal regulators
• Describe the risks associated with COLI and BOLI and how to perform assessments of these programs
• Describe how to perform assessments of compliance with the Federal Reserve's Regulation H, Consumer Protections in Sales of Insurance (CPSI), and the adequacy of a banking organization's oversight and audit program for ensuring compliance with CPSI

Class Size
Minimum class size is 10 with a maximum of 25. Given the high demand and limited enrollment, participants should register early.

Instructors
The first 2.5 days of the course are taught by outside vendors. The remaining 2 days are taught by FRS instructors.

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