Insurance Europe and Reinsurance Advisory Board (RAB) Voice Support for Draft Insurance Capital Standard (ICS) but Raise Concerns

Insurance Europe and its Reinsurance Advisory Board (RAB) express their support for the initial objective of the draft Insurance Capital Standard (ICS) as mandatory capital, which the International Association of Insurance Supervisors (IAIS) is working on. They understand that this initiative creates a “robust, high-quality” global standard that promotes a level regulatory playing field. At the same time, however, they emphasize that the initial objective of the proposal “has been questioned by the changing nature of the project.”

In its response to the consultation launched by IAIS, Insurance Europe welcomes “with particular satisfaction” the inclusion of internal models in the candidate ICS, but warns against the risk of undermining them by including production lands or a inadequate benchmarking.

The sector raises other points related to the concern about technical specifications of the candidate ICS standard model and possible double reporting requirements. The federation also comments on the jurisdictional application of the ICS and expresses its support for existing European prudential frameworks (Solvency II, Solvency United Kingdom and Swiss solvency test) for the application of the ICS in Europe.

Answers from Insurance Europe and of Reinsurance Advisory Council to IAIS consultation