Insurance Capital Standard Should Reflect Regional Differences, Heterogeneity of Business Models and Products
Washington, D.C., October 20, 2016—The Institute of International Finance and The Geneva Association today released a response letter urging the International Association of Insurance Supervisors (IAIS) to ensure that the development of an International Capital Standard (ICS) for Internationally Active Insurance Groups (IAIGs) promotes consistency with existing regional regulatory structures and capital regimes. “We urge the IAIS to take a sequential approach in the development of the ICS,” George Brady, senior advisor and insurance lead at the IIF and Anna Maria D’Hulster, Secretary General at The Geneva Association wrote in the letter. “A number of fundamental and technical issues remain to be dealt with. We believe that these questions should be addressed before releasing the first version of the ICS.” The associations noted that insurance markets around the world are marked by a wide variety of supervisory regimes, demographics, legal requirements, insurance and financial product offerings, consumer risk preferences and potential governmentprovided social security. They also noted that, currently, the ICS’ valuation approach, standard model and several other features do not appropriately reflect these differences. The IIF and The Geneva Association called on the IAIS to better account for this heterogeneity. The associations also urged the IAIS to ensure the ICS does not hinder the contribution of the sector to economic growth as major long-term investors and the ability of insurers to meet consumer demand and expand markets.
