GFIA has responded to a consultation conducted by the International Association of Insurance Supervisors (IAIS) on draft criteria to assess whether the Aggregation Method (AM) provides comparable outcomes to the Insurance Capital Standard (ICS), in the form of a letter to the IAIS secretariat.
In its letter, GFIA welcomed the launch of the consultation but indicated that it would not be possible to submit a response to the detailed questions in the consultation, in light of the different views that remain between jurisdictions on the ICS project.
Nonetheless, GFIA underlined some key points in its letter, namely:
- The fact that the ICS version 2.0 is not final. GFIA expects the standard to have evolved after the monitoring period ends in 2024 in response to any identified current and future shortfalls. As the ICS itself is still subject to change, GFIA questions the appropriateness of conducting a comparability assessment using an unfinished standard as a benchmark or reference.
- Some of the wording used in the draft criteria could be deemed open to wide ranging interpretation.
- The fact that the short timeframe available to respond to the consultation proved to be a challenge. Responding to this complex exercise is a significant undertaking and GFIA’s members would have welcomed extra time to engage meaningfully with their member companies, other stakeholders and ultimately with the consultation itself.
- Finally, GFIA has concerns about the comparability assessment timeline, as it may not give enough time to complete the exercise and does not appropriately account for the planned consultation and economic impact assessment of the ICS expected to be launched in mid-2023.