IAIS: Global Insurance Capital Standard; IAIS Issues Second Consultation Document for Risk-based Global Insurance Capital Standard

Sullivan & Cromwell LLP - August 5, 2016

On July 19, 2016, the International Association of Insurance Supervisors (IAIS) issued a public consultation document on the Risk-Based Global Insurance Capital Standard (ICS) Version 1.0.  The ICS is a group-wide, consolidated insurance capital standard being developed by the IAIS for application to Internationally Active Insurance Groups (IAIGs) and Global Systemically Important Insurers (G-SIIs). Once finalized, the ICS will constitute the minimum capital adequacy standard to be achieved by IAIGs and G-SIIs. Supervisory authorities of IAIS member jurisdictions will be expected to implement the finalized ICS taking into account specific market circumstances in their respective jurisdictions. The consultation document presents various proposals, open issues and technical details on ICS Version 1.0, focusing on valuation, qualifying capital resources, and capital requirements.  The IAIS expects to adopt ICS Version 1.0 for confidential reporting in mid-2017, which will be followed with the development of an ICS Version 2.0.