Insurance Europe responded to the second consultation by the IAIS on the basic capital requirement (BCR) for global systemically important insurers (G-SIIs).
In its response, Insurance Europe noted that, despite the additional details provided, a thorough assessment of the BCR calibration is not possible until the design and calibration of the higher loss absorbency (HLA) becomes more clear.
The response also highlighted the opportunity for the IAIS to draw on the extensive work and experience from Solvency II, and hence avoid developing slightly different versions of concepts already developed and tested for Solvency II to avoid burdening G-SIIs with unnecessary additional work and costs.
While noting the clarification that the BCR would not apply beyond G-SIIs, Insurance Europe took the opportunity to highlight that the scope of the BCR should be limited to the development of the HLA, as it would be difficult to envisage a different purpose given its simplicity.
The IAIS is expected to finalise its BCR proposal and submit it to the FSB ahead of the G-20 summit in November.