The Association of British Insurers (ABI) has insisted that the International Association of Insurance Supervisors’ (IAIS) Insurance Capital Standard (ICS) is not fit for purpose, and has called for a longer timeline for implementation.
The IAIS has just announced the release of ICS Version 1.0 for extended field testing, which it called “a significant milestone for the IAIS as a standard-setting body”. It said it explains the rationale for the design and calibration of the ICS components and, where relevant, the various options being considered. It also sets out future steps towards ICS Version 2.0, including future field-testing exercises and consultations. The IAIS noted that about 50 of the largest insurance groups in the world are now involved in the extended field-testing process.
ABI director of regulation, Hugh Savill, said: “The IAIS has published Version 1.0 of ICS, their proposed standard for internationally active insurance groups. However, we remain concerned the ICS is not fit for use in the British market. It makes no allowance for internal models, despite firms spending substantial time and money developing them for Solvency II. It does not allow for appropriate treatment of long-term business with guarantees, like annuities here in the UK. And it gives insufficient recognition of diversification – despite this being at the heart of how insurance works.”
The ICS is one of the components of ComFrame – the Common Framework for the Supervision of Internationally Active Insurance Groups (IAIGs). ComFrame consists of both quantitative and qualitative supervisory requirements tailored to the complexity and international scope of IAIGs, the IAIS said.
Full article on Commercial Risk (subscription required)
© Commercial Risk Europe
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article