The US insurance industry and its regulators will be even more concerned about and actively engage with the ongoing efforts by the International Association of Insurance Supervisors (IAIS) to develop international insurance capital standards.
The IAIS has already developed the Basic Capital Requirements (BCR) for global systemically important insurers (G-SIIs) for reporting in 2015, and is developing the Higher Loss Absorption (HLA) capacity for completion by the end of 2015 and a risk-based group-wide global insurance capital (ICS) standard for Internationally Active Insurance Groups (IAIGs) for completion by 2016 and implementation in 2019.
US insurance regulators and industry are watching these developments warily. The process undertaken by the IAIS has been criticized for lack of transparency and lack of opportunities for interested parties to participate. More fundamentally, the US has questioned the need for and potential costs and other concerns with respect to such international standards for the US insurance industry.
However, there is a sense that the IAIS process is inevitable and that the new international capital standards will filter down to the US insurance industry in one way or another. This realisation may lead the US insurance regulators and industry to be more active in responding to, and engaging with, the IAIS on the development of international insurance capital standards in 2015.