- Amid Transparency Criticism, International Association of Insurance Supervisors Publishes Risk-Based Insurance Capital Standard, Higher Loss Absorbency Development Principles
- September 30, 2014
- Law Firm: Colodny Fass P.A. - Fort Lauderdale Office
Directed by the Financial Stability Board to develop a risk-based global insurance capital standard within the Common Framework for the Supervision of Internationally Active Insurance Groups ("Comframe"), the International Association of Insurance Supervisors ("IAIS") published applicable principles thereof, along with principles for development of a Higher Loss Absorbency requirement for globally systemically important insurers on September 22, 2014.
Meanwhile, the National Association of Insurance Commissioners ("NAIC") has scheduled an October 14, 2014 forum on international insurance regulatory developments at the Brookings Institution in Washington, D.C. The agenda includes discussion on an IAIS announcement earlier this year that its capital standards meetings would be invitation-only, meaning insurance company representatives and consumers would likely be denied access to IAIS' deliberations on the standard developments.
"The NAIC has been actively working toward more transparency in how it conducts business," NAIC CEO Ben Nelson told Best's News Service. "We see this latest announcement from the IAIS as antithetical to what we have done at the NAIC and what the IAIS should be doing."
Underscoring that concern, bipartisan resolutions were introduced in Congress earlier this month to put the opposition on record. Senators Jon Tester (D-Mont.) and Dean Heller (R-Nev.) sponsored the legislation in the Senate, and U.S. Representatives Bill Huizenga (R-Mich.) and Greg Meeks (D-N.Y.) filed a bill in the House.
Nat Wienecke, senior vice president of federal government relations at the Property Casualty Insurers Association of America ("PCI") said "These resolutions are a significant step in making clear that all agencies representing the U.S. on international issues must stand firm against efforts to reduce transparency at the IAIS. Openness is critically important to U.S. consumers and companies as the IAIS develops policy on global insurance regulatory standards."
"PCI strongly condemns the IAIS proposal to reduce public access and, by extension, accountability at the IAIS," Mr. Wienecke continued. "We have long supported and participated in the work of the IAIS. But PCI supports open and transparent meetings for developing international regulations, unless there are specific enumerated reasons to close them, such as personnel or company-specific discussions."