Commenting on the release of version 1.0 of the global Insurance Capital Standard by the International Association of Insurance Supervisors (IAIS), ABI Director of Regulation, Hugh Savill, said:
“The IAIS has today published version 1.0 of the Insurance Capital Standard (ICS), their proposed standard for internationally active insurance groups. However, we remain concerned the ICS is not fit for use in the British market.
“It makes no allowance for internal models, despite firms spending substantial time and money developing them for Solvency II. It does not allow for appropriate treatment of long-term business with guarantees, like annuities here in the UK. And it gives insufficient recognition of diversification – despite this being at the heart of how insurance works.
“The ABI looks forward to continuing to work with the IAIS to address these issues – but I am doubtful they can be resolved within their ambitious timelines for the development and implementation. I would urge the IAIS to consider a more pragmatic timeline.”