Financial Services Management: Global Insurance Capital and Prudential Standards
he International Association of Insurance Supervisors has issued a series of documents describing its plans for prudential regulation of internationally-active insurance companies, building on recent work defining global systemically-important insurers (G-SIIs) and the broader framework of reform initiatives from the Financial Stability Board (FSB) and Basel Committee. The standards include the first risk-based capital rules for insurers akin in some respects to the Basel III rules for banks, restructuring its ongoing effort to create a common regulatory framework (ComFrame) for internationally-active insurance groups (IAIGs). They also include new macroprudential standards for G-SIIs that would likely require restructuring of designated firms into holding companies with carefully-delineated business lines that segregate “traditional” insurance from non-traditional activities (e.g., monoline credit insurance) and non-insurance activities (e.g., securities financing).