Our Positions | Insurance Core Principles

The International Association of Insurance Supervisors was created in 1994 by the NAIC to identify insurance core principles for developing countries that were seeking direction to build their own insurance regulation structure. Since that time, it has grown to a voluntary membership organization of insurance supervisors and regulators from more than 200 jurisdictions in nearly 140 countries. The IAIS mission is to promote effective and globally consistent supervision of the insurance industry for the development and maintenance of fair, safe, and stable insurance markets, benefiting and protecting policyholders and contributing to global financial stability. This is accomplished through the development of those insurance core principles as well as standards and other supporting materials that are used for the supervision of the insurance sector.

The ICPs were developed to illustrate a variety of options and to share best practices; they were not written with the intention that every country in the world should comply with the language of the principals.

The G20 chose the ICPs as the basis for International Monetary Fund assessments for the Financial Sector Assessment Program for insurers. Following the 2008 financial crisis, all countries in the G20 agreed to IMF assessments of their financial-sector laws and regulations every five years. In some sectors of the economy, global standards exist that have been negotiated and agreed upon for application to the regulators around the world. However, in the insurance sector, there is only one organization that is considered a global standard setter, the IAIS.

The ICPs are regularly reviewed and updated. There are between 25 and 30 specific ICPs that cover issues ranging from those governing supervisors (their selection, actions, authority, review/reporting and cooperation), to those governing insurers and intermediaries (basic solvency, enterprise risk management, investments, accounting practices, mergers, acquisitions, resolution, and many more).

Currently each supervisory member of the IAIS is subject to peer review and IMF assessment of their compliance with the ICPs. The reviewing authorities and the executive committee of the IAIS are dominated by European supervisors, especially those with a consolidated banking and insurance regulatory structure. This has resulted in bank-centric style for the language of the ICPs as well as Euro-centric approach at the IAIS. Consequently, there are numerous debates over the appropriate approach to the revisions to the ICPs.

Understanding Insurance – An Introductory Guide

NAMIC Position

NAMIC is very concerned about the influence of the IAIS over the U.S. regulatory system. The association has suggested that more flexibility in the ICPs would allow for reasonable regulatory differences from country to country. This view is shared by most of the trade associations around the world. In some ICP debates these pleas have been heard. But several of the principles and guidance related to the ICPs do not support this flexibility.

NAMIC’s basic concerns center on the following issues:

  • Flexibility of the language to encompass reasonable regulatory alternatives;

  • Proportionality of application to small and noncomplex companies;

  • Protection of the U.S. system for statutory accounting, RBC, and basic legal entity regulation;

  • Protection of the state-based regulatory structure; and

  • Cost-benefit analysis of changes to or addition of regulatory principles

NAMIC regularly debates the strict applicability of the international standards to U.S. insurers. The association works with its state regulators to remind them of strength of the U.S. state regulatory system and to urge them to push back on attempts to impose unnecessary European or other international ideas on U.S. regulatory structures. NAMIC will always stand strong to maintain an efficient and competitive insurance market for its policyholders.

NAMIC News on Insurance Core Principles


Erin Collins
Senior Vice President - State and Policy Affairs