Insurance Europe responded to an International Association of Insurance Supervisors (IAIS) consultation on the higher loss absorbency (HLA) for global systemically important insurers (G-SIIs).
In its response Insurance Europe demanded that the HLA should, in line with earlier communications from the IAIS and the Financial Stability Board (FSB), focus on systemically relevant activities and not penalize traditional insurance.
Insurance Europe said that an assessment of the impact of the HLA framework is difficult given the related policy areas that are still subject to change or clarification. It also said that the fundamental design of the HLA should be reviewed once the other policy aspects are completed.
Insurance Europe also raised concerns about the inappropriate link between size and level of HLA penalty.