IAIS consults on controversial G-SII requirements
Thursday, 07 30 2015, Category: Insurance and Reinsurance, Country: World
The International Association of Insurance Supervisors (IAIS) has begun a public consultation to help finalise development of the Higher Loss Absorbency (HLA) requirement for global systemically important insurers (G-SIIs). The IAIS is seeking feedback on several options to further support and inform the design, development and calibration of the HLA.
As a foundation for HLA requirements, last year the IAIS developed the Basic Capital Requirements (BCR) to apply to all group activities, including non-insurance activities, of G-SIIs.
According to the IAIS, when the HLA is implemented, G-SIIs will be expected to hold qualifying regulatory capital that is not less than the sum of the required capital amounts from the BCR and HLA. The consultation suggests capital requirements could be around 20% higher as a result of G-SII status. The rules come into force in 2019.
Source: Commercial Risk Europe