WASHINGTON – Secretary General of the International Association of Insurance Supervisors Treasury secretary on the organization's efforts to develop a 2.0 version of a global international capital standard despite concerns expressed by the secretary about its approach.
The IAIS is currently developing a second version of a risk-based global ICS for internationally active insurance groups, with a planned adoption scheduled for its annual general meeting in November and a monitoring period that can start in 2020 and last for five years.
The US Treasury Department is committed to continued engagement with the international standard setting work at the IAIS, Treasury Secretary Steven Mnuchin said at the National Association of Insurance Commissioners' International Insurance Forum in Washington on Monday.
to develop global risk-based capital standards for supervisors around the world to use in assessing the financial health of insurance groups, ”he said. However, we have concerns about certain areas or how it is being developed. Treasury recognizes that many large insurance companies have significant operations in foreign jurisdictions that can adapt some version of this. ”
" I think they were very helpful, "Jonathan Dixon, secretary general of the IAIS, said of Mr. Mnuchin's remarks during a Tuesday session at the NAIC's forum. “That's very helpful because unless you know the concerns, you can't address them. It was very positive to hear the remarks about the continued commitment to engagement on the development of a global insurance capital standard. ”
Meanwhile, a group of 42 U.S. senators advocated in favor of a public statement that a global capital standard for insurers is not necessary in a letter sent on Monday to the vice chairman of the supervision of the board of governors of the Federal Reserve System.
, the Treasury Department will work to develop “a strong and coordinated position on the upcoming adoption of 2.0 and the next five-year monitoring period from 2020 to 2024,” Mr. Mnuchin said, "Treasury is working to improve the design so that it more appropriately reflects the unique business model of insurers," he continued. “One area we've identified is the market valuation approach and the negative effects it could have on the insurance companies to provide long-term savings products, which are important to insurers and policyholders in the United States.”
The IAIS is committed to examining unintended consequences of version 2.0, Mr. Dixon said.
"We recognize that regulatory frameworks not well designed can introduce risk," he said. "That's why I think we've been looking at the monitoring period we are actively looking at. consequences and parts of the ICS that need review. We haven't been specific yet about what would look like, what it would cover. I, in previous remarks, have said it will need to look at things like the impact of long-term products. That is a key unintended consequence that is in the minds of people. ”
, "Mr. Mnuchin said. "The reference ICS adopted in November 201
" Team USA must also remain actively engaged during this period and advocate for US The interests of the US insurance sector remain competitive overseas, ”he added.
The issue of the ICS accounts for comparable outcomes was also raised by the treasury secretary.
approach to solvency regulations taken at various jurisdictions around the world, including our state-based regulatory system, ”Mr. The Federal Insurance Office "will continue to advocate the IAIS increase its focus on the important issues of comparability of outcomes in order to enhance compatibility with the U.S. insurance regulatory regime. ”
“ We know very clearly the remarks about making sure that it takes into account jurisdictional differences in insurance business models, in national supervisory regimes, ”Mr. Dixon said in response. “It's about a balance because of how one hand takes those differences into account while still achieving our objective for ICS, which is achieving a common language to help supervisors do group-wide supervision better. If you have something that is too basic, too high level, you are going to fail on the comparability. ”
Mr. Mnuchin also raised a concern about the November target for adoption of version 2.0
"Getting the ICS right is more important than meeting any fixed schedule that mandates completion at a specific point in time," he said.