MANILA, Philippines - The International Association of Insurance Supervisors (IAIS) has begun a series of consultation to help guide development of its risk-based, global insurance capital standard (ICS).
This is the first of three planned public consultations on the ICS and is open until February 2015.
“As the international insurance standard setter, the IAIS is committed to providing global responses to global issues,” said Felix Hufeld, chairman of the IAIS Executive Committee. “This public consultation demonstrates not only our commitment to provide global insurance policy solutions but to do so in a way best designed for the insurance sector and based on the critical input of all our stakeholders.”
The IAIS considers a sound capital and supervisory framework for the insurance sector essential for supporting financial stability and protecting policyholders. It targets to develop and popularize the ICS by 2016.
The ICS will be developed to apply to internationally active insurance groups (IAIGs) as part of the IAIS’ common framework for the supervision of IAIGs or ComFrame.
This public consultation is the first step in a multi-year process to develop and finalize the ICS.
The purpose of the consultation is to solicit feedback from members and stakeholders on elements of the proposed ICS such as valuation, qualifying capital resources, an example of a standard method for determining the ICS capital requirement as well as other potential methods for determining the ICS capital requirement.
It contains more than 160 specific questions the feedback from which, in addition to the Principles for ICS Development, will guide the IAIS as it continues to develop the ICS.
Priorities for development in 2015 include development of an example of a standard method for determining the ICS capital requirement, further consideration of the approaches to valuation and the definition of qualifying capital resources.
Field testing, which began in 2014, will continue to play a critical role in this process. The priorities for field testing in 2015 will be to analyze the calibration of, as well as provide insights to assist in further development of, the example standard method for calculating the ICS capital requirement.
In addition, field-testing will provide insights to assist further development of the definition of capital resources and valuation approaches. Further consultations on ICS will occur as part of consultations on ComFrame.
The IAIS is a global standard setting body whose objectives are to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders; and to contribute to global financial stability.
Its membership includes insurance regulators and supervisors from more than 200 jurisdictions in nearly 140 countries.