Olav Jones, deputy director general of Insurance Europe, commented: "European insurers support the IAIS' work on the Holistic Framework, which is an appropriate way to identify and monitor potential systemic risks in the insurance sector. The implementation of the Framework is progressing well in Europe, with strong engagement by the industry with supervisors and regulators to address outstanding elements. These include a well-designed and proportionate recovery and resolution framework and appropriate information-gathering for climate and liquidity risks. Insurance Europe has also stressed that any IAIS liquidity metrics should align with the macroprudential objective of the Holistic Framework and avoid being over engineered.
"The industry also looks forward to seeing the outcome of discussions on the ICS. European insurers support the development of global standards, as they are an important element in ensuring global financial stability and consumer protection. It is, therefore, crucial that the project leads to a high-quality and robust global insurance standard, which promotes a sound, global regulatory level playing field. Incorporating internal models in the ICS is also a necessary part of the framework, as internal models are a key risk management and capital measurement tool.
"A point of discussion at the Global Seminar will be how to assess if the Aggregation Method provides a comparable outcome to the ICS. Insurance Europe takes the view that there cannot be two versions of the ICS and that there is a need for a quantitative comparability approach. The IAIS is expected to launch a consultation on this question at its Global Seminar.
"Insurance Europe recognizes that it will be challenging for the IAIS to define a comparability assessment approach which satisfies the different insurance markets across the world. This is, however, key because, for the ICS to be considered a global standard, all major jurisdictions must implement it in a consistent manner."