(Re)insurers are being challenged as the regulatory environment becomes more complex, with regulation increasing considerably at multiple levels in numerous jurisdictions throughout the world. Insurers are facing new costs and pressures in their efforts to manage the regulatory landscape.
Selected Developments of note:
The International Association of Insurance Supervisors (IAIS) has been working on the development of a risk-based global Insurance Capital Standard (ICS) for Internationally Active Insurance Groups (IAIG’s) as part of their development of a Common Framework for the Supervision of IAIG’s - an initiative known as ComFrame.
They have also been working on the development of Basic Capital Requirements (BCR) and Higher Loss Absorbency (HLA) requirements for Global Systemically Important Insurers (G-SIIs). The BCR, which is to initially form the basis of the HLA, was developed in October of 2014, and will apply to all group activities (including non-insurance activities) of G-SIIs. The IAIS has very recently begun a public consultation to finalize the development of the HLA requirement.
The IAIS has also recently decided to change the release of the ICS from 2016 until 2017 (when the first version of the capital rules will be released) and 2019 (when the second version is to be released with the adoption of ComFrame). Members of the IAIS are currently scheduled to begin implementing ComFrame in early 2020.