The Financial Stability Board has now finalized protocols designed to ensure not only that global systemically-important insurers (G-SIIs) can be resolved in an orderly way, but also that other complex cross-border groups with significant insurance operations can be handled without systemic risk.  Building on an initial consultation, the final protocols rebalance resolution priorities so that they no longer emphasize financial stability at the possible expense of policy-holder protection – a major industry concern with the initial proposal.  Other aspects of the final standards also address criticism that the consultation was unduly bank-centric, but the details of the guidance continue to demonstrate an FSB preference for actions that, if forced on resolution authorities, preserve financial stability even at cost to policy-holders.  Reflecting global efforts to prevent resolution, reduce the risk of taxpayer bail-outs, and limit negative externalities, the new protocol includes specific requirements for critical functions and operational continuity that may force subsidiarization and other restructuring.   

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