ABIR extends its support to the IAIS’s international solvency capital standards, but cautions that it must build on existing regulatory investment and reflect the capital needs of the P&C sector.
The Association of Bermuda Insurers and Reinsurers (ABIR) speaking from Basel, Switzerland says that the International Association of Insurance Supervisors’ (IAIS) risk-based approach should build on “extensive investment in regulatory systems already made by IAIS member jurisdictions” and should recognise the unique nature of individual domiciles.
Leila Madeiros, deputy director of ABIR says: “We would support a simple, minimum, base-line risk based capital measurement that provides an illustration of a group’s regulatory capital needs, affords a basis of comparison amongst international groups and focuses on a minimum or floor capital requirement that if breached would be the basis for regulatory discussion.”
She says that basic capital requirement design needs to “distinguish how risks are managed by property and casualty companies from life companies.”
ABIR says that while basic capital requirement have been used to establish which companies are considered to be globally systemically important insurers, it expects the framework to become “the baseline component of the insurance capital standard (ICS)”.
“These will be broadly applied to international insurance groups as part of the IAIS ComFrame project and may serve as the base for revisions of existing jurisdictional capital requirements.”
ABIR says it is concerned that the timeline for the development of these new capital standards is too short.
ABIR, IAIS, P&C, regulation, insurance, reinsurance