Global: IAIS adopts Insurance Capital Standard to promote resilient insurance sector
Source: Middle East Insurance Review | Jan 2025
The International Association of Insurance Supervisors (IAIS) has adopted the first comprehensive global capital standard for insurance supervision, the Insurance Capital Standard (ICS), providing a risk-based measure of capital adequacy for internationally active insurance groups (IAIGs).
Additionally, members endorsed substantial updates to the IAIS Insurance Core Principles and Common Framework for the supervision of internationally active insurance groups (ComFrame). The updates relate to climate risk, recovery and resolution and valuation and capital adequacy.
“The adoption of the ICS and these updated standards represent a pivotal moment for the global insurance sector,” said, IAIS executive committee chair Shigeru Ariizumi.
The ICS provides a globally comparable risk-based measure of capital adequacy for IAIGs and forms the quantitative element of ComFrame. It will serve as a group-wide prescribed capital requirement, which is a solvency control level below which supervisors will intervene on group capital adequacy grounds.
The ICS will help ensure that IAIGs maintain sufficient capital to withstand potential stresses and thereby protect policyholders. It will also provide a consistent and transparent framework for supervisors to evaluate the financial soundness of IAIGs. Currently, there are 59 IAIGs identified by group-wide supervisors from 18 jurisdictions across the globe. M