EIOPA welcomes the approval of the global Insurance Capital Standard (ICS) by the International Association of Insurance Supervisors (IAIS) as a prescribed capital requirement for internationally active insurance groups (IAIGs). EIOPA also notes that the United States’ Aggregation Method (US AM) provides a basis for the implementation of the ICS and welcomes the commitment of US regulators to address outstanding areas.
The adoption of an ICS is a significant step toward global consistency in the regulation and supervision of IAIGs. The ICS embraces many of the key features that have made the Solvency II framework a cornerstone of stability and resilience for the European insurance sector. Crucially, these include market-adjusted valuation, risk-based capital requirements and the use of internal models, which are essential elements of Solvency II.
EIOPA also notes that the provisional US Aggregation Method, in its current form, still requires adjustments before it can deliver outcomes comparable to those of the ICS. In this regard, EIOPA welcomes the commitment made by US regulators to undertake further work in certain areas, namely the treatment of interest rate risk and the timing of supervisory interventions.
Looking ahead, EIOPA stands ready to collaborate closely with the IAIS and its members to ensure a smooth transition to the new ICS standard and to support the implementation assessment process.
EIOPA would like to thank stakeholders worldwide for their time and effort in establishing the new standard. Without their expertise, insights and data, building a global capital standard for insurers would not have been possible.
Learn more about the agreement on IAIS’ website
Notes
The Insurance Capital Standard has been developed as a consolidated, group-wide capital standard for internationally active insurance groups. It aims to provide a globally comparable, risk-based measure of IAIGs’ capital adequacy, creating a common language for supervisory discussions on group solvency and promoting global alignment across group capital standards.
The IAIS is a global standard-setting body dedicated to promoting effective and consistent supervision of insurers worldwide. Its members include insurance supervisors and regulators from over 200 jurisdictions, including EIOPA and national supervisors from countries in the European Economic Area.