Switzerland-based Financial Stability Board (FSB) has identified initial lot of global systemically important insurers (G-SIIs) to which the International Association of Insurance Supervisors’ (IAIS) policy measures will be implemented.

The nine G-SIIs include Germany-based Allianz, AIG, MetLife and Prudential Financial in the US, French group Axa and Ping An Insurance of China, UK’s Aviva and Prudential and Italy’s Assicurazioni Generali.

Designed to address risks to the G-SIIs, the set of policy measures include recovery and resolution planning requirements, enhanced group-wide supervision and higher loss absorbency requirements.

FSB, which has been established by the group of 20 nations, said that these groups are critical to the functioning of the global financial system and the new rules aims to thwart bankruptcy and subsequently costly bailout.

Bank of England governor and FSB chairman said that a sound capital and supervisory framework for the insurance sector is essential for supporting financial stability.

"These policy measures will be followed over time by a substantially strengthened comprehensive regulatory and supervisory framework for all internationally active insurers," Carney added.

Immediate implementation of enhanced group-wide supervision will take place at the identified institutions, with establishment of crisis management groups by July 2014, and the recovery and resolution planning requirements to be met by end-2014.

IAIS will also develop straightforward, backstop capital requirements that are applicable to all group activities, including non-insurance subsidiaries, which will be finalised by G20 Summit in 2014.

Implementation details for higher loss absorbency requirements will be developed by end-2015 and will apply starting from January 2019 to those G-SIIs identified in November 2017.