Basic Capital Requirement and Higher Loss Absorbency Reporting for G-SIIs: The International Association of Insurance Supervisors Releases Memorandum to G-SIIs on Confidential Reporting of the Basic Capital Requirement and Higher Loss Absorbency

Sullivan & Cromwell LLP - February 22, 2016
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On February 17, the International Association of Insurance Supervisors (IAIS) released a public version of a memorandum to Global Systemically Important Insurers (G-SIIs), dated December 18, 2015, providing guidance on the IAIS approach for confidential reporting of the Basic Capital Requirement (BCR) and Higher Loss Absorbency (HLA) to group-wide supervisors. This reporting will be required as part of the IAIS field testing data collection process, which began in 2015 for the BCR and will begin in 2016 for the HLA, for the period up to and including 2018. Each G-SII will be required, among other things, to report its BCR and HLA to its group-wide supervisor annually and upon request of the supervisor. The IAIS has committed to maintain appropriate governance and security protocols to protect the confidentiality of the information collected. Technical instructions and a reporting template will be specified by the IAIS to facilitate consistent reporting by G-SIIs of the BCR and HLA.