The International Association of Insurance Supervisors (IAIS) unveiled an updated draft of ComFrame last week during the association's 20th annual conference in Taipei. The new version includes substantial changes to the capital adequacy assessment guidance to accommodate the IAIS's planned global insurance capital standard (ICS). The role of the group-wide supervisor is also more clearly defined.
Yet there are concerns that the IAIS does not afford insurers and supervisors enough flexibility to use existing national regulatory regimes as the basis for the proposed framework. Philippe Brahin, head of governmental affairs and sustainability at Swiss Re in Zurich, says: "Module three [group supervisory process] of ComFrame should be more ambitious as the conditions for mutual recognition of regimes should be fully reflected. ComFrame should serve as a platform to recognise regimes, and not add another layer of supervision on groups already subject to comprehensive group supervision".
Module 3 emphasises the role of the group-wide supervisor and supervisory college in determining appropriate measures, but has little to say on how existing regimes should be recognised. Insurers fear this means ComFrame may impose additional regulatory and reporting requirements on firms. They warn that if ComFrame is too prescriptive it will interfere with the running of existing and incoming regimes at the national level.
The IAIS is keen to stress that the new framework will not undermine national regimes. Yoshihiro Kawai, Basel-based secretary-general of the IAIS, says: "ComFrame aims to create outcome-focused international supervisory requirements to be translated into local regimes to the extent that these don't already have these requirements. It does not intend to create an additional layer of supervision of groups."
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