NAMIC Highly Critical of IAIS’ Proposed Criteria for Evaluating the U.S. Approach to Group Capital

The National Association of Mutual Insurance Companies today submitted comments on the International Association of Insurance Supervisors’ public consultation on the draft criteria that will be used to assess whether the Aggregation Method provides comparable outcomes to the Insurance Capital Standard.

“NAMIC has significant concerns with the proposed criteria and methodology for evaluating comparability. The comparability assessment pits one framework and methodology against the other and incorrectly deems the ICS as the gold standard for which the aggregation method must strive to emulate,” said Erin Collins, NAMIC’s senior vice president of State & Policy Affairs. “The IAIS assessment process is flawed and does not recognize that the aggregation method is an established method that will achieve the desired goals of providing regulators with an understanding of group capital valuations and potential entities that are weak in a group.

While NAMIC appreciates the effort to establish a method to compare jurisdictional approaches to group capital, Collins said, “the IAIS should abandon the draft criteria and instead focus on the practical aspects that the aggregation method affords to supervisors, such as gaining an appreciation for the jurisdictional differences, supporting the exchange of information between supervisors, and providing regulators with a better understanding of the risk management framework and solvency situation of the insurers in an insurance group.

“The application of the same capital standard to unique companies that come from very different regulatory environments with very different economic and political goals will not produce comparable conclusions about capital and solvency.”

Article Posted: 08.15.22
Last Updated: 08.15.22