The National Association of Mutual Insurance Companies is encouraged by the effort of the U.S. Treasury, the Federal Reserve, and the National Association of Insurance Commissioners, collectively known as “Team USA,” at the International Association of Insurance Supervisors Annual Conference in Abu Dhabi to protect America’s state-based insurance marketplaces and regulatory structure. The IAIS agreed to enter a monitoring period for its global Insurance Capital Standards but did not formally adopt implementation.
“NAMIC applauds the work done by Team USA on behalf of the United States and its state insurance marketplaces,” said Jimi Grande, senior vice president of government affairs for NAMIC. “They were able to make a great deal of progress in moving the Insurance Capital Standard process in a positive direction. At the end of the day, though, the IAIS still moved into the monitoring period with an ICS that is not fit for its purpose, so we equally appreciate that Team USA recognized that the ICS still poses too many challenges for U.S. insurers.”
During negotiations, the IAIS agreed to a definition of comparable outcomes with the alternative U.S.-based aggregation methodology assuming it produces similar but not necessarily identical results. This was a significant acknowledgement potentially clearing the way for a U.S. standard to be recognized by the IAIS as comparable. Additionally, the agreement commits the IAIS to consider modifications to the ICS during the monitoring period as opposed to only at the end of the period and to conduct an economic impact assessment of implementation. However, U.S. state insurance commissioners and their federal counterparts made very clear to IAIS that the U.S. could not adopt the ICS in its current form and that they would not require US. insurers to participate in the ICS monitoring period.
“The decision to enter the monitoring period is by no means the end of the road for the ICS or Team USA,” Grande said. “While we still have concerns with version 2.0 as it enters the monitoring period, there will be opportunities to make necessary improvements, including formally adopting comparable jurisdictional flexibility to the approach. NAMIC hopes future negotiations will result in an agreement providing greater clarity for regulators around the globe without imposing ill-fitting regulations on U.S. marketplaces or weakening consumer protections.”
Article Posted: 11.18.19
Last Updated: 11.18.19