This is a key milestone in the comparability assessment project and marks further progress of the IAIS' 2017 agreement on the implementation of ICS version 2.0, including a unified path to convergence of group capital standards in furtherance of its ultimate goal of a single ICS that achieves comparable outcomes across jurisdictions.
An explanatory note providing further background information on the project and the proposed draft criteria accompanies the consultation document.
In November 2017, the IAIS set out an agreement on the implementation of Insurance Capital Standard (ICS) Version 2.0, including a unified path to convergence of group capital standards in furtherance of its ultimate goal of a single ICS that achieves comparable outcomes across jurisdictions. In November 2019, the IAIS agreed on a process and timeline for developing criteria to assess whether the AM provides comparable outcomes to the ICS. Following public consultation in November 2020, the IAIS agreed on the definition of comparable outcomes and high-level principles (HLPs) in March 2021 to inform the criteria that will be used to assess whether the AM provides comparable outcomes to the ICS.
The IAIS began developing the draft comparability criteria in April 2021. Detailed criteria have been developed for each HLP and are the subject of this consultation. The draft criteria have been developed in such a way that the AM is neither precluded at the outset as an outcome equivalent approach to the ICS for measuring group capital, nor given a free pass. Stakeholders are thus invited to provide feedback on whether each individual criterion is clear, adequate, sufficient or too restrictive, considering the HLP to which it relates.
The consultation provides the opportunity for obtaining perspectives and technical input on various parameters included in the criteria, in the form of targeted questions to support this work. In particular, the IAIS seeks input to aid in the development of specific scenarios for the sensitivity analysis envisaged in the draft criteria for HLP 1. The IAIS is also seeking feedback on considerations for determining representativeness of the non-life insurance sample. Following consideration of comments on the draft criteria, the IAIS will finalise the criteria that will be used to assess whether the AM provides comparable outcomes to the ICS. This assessment is scheduled to begin in Q3 2023.