24 October 2014 Insurance

IAIS unveils rules for systemically important insurers

The International Association of Insurance Supervisors (IAIS) has concluded development of the first-ever global insurance capital standard for global systemically important insurers (G-SIIs).

The basic capital requirements (BCR) have been endorsed by the Financial Stability Board and will apply to all group activities, including non-insurance activities, of G-SIIs.

The BCR will apply to nine insurers deemed to be G-SIIs: Allianz, American Insurance Group (AIG), Generali, Aviva, Axa, MetLife, Ping An Insurance Company of China, Prudential Financial and Prudential UK.

“With design of the BCR now complete the IAIS has concluded the first of several steps in its process to develop group-wide global insurance capital standards,” said Peter Braumüller, chair of the IAIS executive committee. “This achievement demonstrates the commitment of our Members to our mission to promote globally consistent supervision of the insurance industry and contribute to global financial stability.”

Beginning in 2015, the BCR will be reported on a confidential basis to group-wide supervisors and be shared with the IAIS for purposes of refining the BCR as necessary. During this reporting period, the IAIS will review the suitability of the BCR factors to ensure that the BCR remains fit for purpose. From 2019, G-SIIs will be required to hold capital no lower than the BCR plus HLA.

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