The International Association of Insurance Supervisors (IAIS) executive committee has approved the final version of the Insurance Capital Standard (ICS) as a prescribed capital requirement for internationally active insurance groups (IAIGs), which will be recommended for adoption by the end of the year.
“Arriving at an agreement on a global Insurance Capital Standard as a prescribed capital requirement is a landmark achievement for the IAIS,” said Shigeru Ariizumi, IAIS Executive Committee chair, in a statement. “This decision reflects our unwavering commitment to enhancing global insurance supervision and ensuring the resilience of the insurance sector.”
The ICS forms the quantitative element of ComFrame, the Common Framework for the supervision of IAIGs. The qualitative elements of ComFrame, including governance and risk management, were adopted in 2019.
In addition, IAIS has concluded that an Aggregation Method (AM) provides a basis for implementation of the ICS to produce comparable outcomes. The comparability assessment of the provisional AM has highlighted some areas where work as part of implementation of the final AM will help ensure convergence, specifically treatment of interest rate risk and appropriate timing of supervisory intervention.
The IAIS has also published a report on the AM comparability assessment, which outlines the approach followed for the assessment and provides more detail on the areas that were assessed as providing comparable outcomes and, in some circumstances, divergent outcomes where work as part of implementation of the final AM will help ensure convergence with the ICS.