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EU insurers call on IAIS to ensure level playing field with ICS

Two advocacy groups representing EU insurers and reinsurers have written a joint letter to the European Commission highlighting their views on the development of the Insurance Capital Standard (ICS).

As version 2.0 of the ICS is scheduled to be adopted in November 2019, Insurance Europe and the Pan-European Insurance Forum (PEIF) wrote to Commission vice president, Valdis Dombrovskis, to stress the need for a global level playing field for all internationally active insurance groups and all participating jurisdictions in the monitoring period of ICS 2.0. This means that all concerned jurisdictions should respect the commitments made in the Kuala Lumpur Agreement.

The letter called for decisions on key aspects of the ICS to be made before adoption of ICS 2.0 to ensure that convergence and agreement within the supervisory community is achievable. The upcoming five year monitoring period should identify potential flaws in the ICS and fix them as and where needed.

In addition, Europe is engaged in the Solvency II 2020 review, which will consider a range of improvements, in particular addressing flaws in the treatment of long-term business. The work done on the Solvency II 2020 review should inform the contributions by European national supervisory authorities and the European Insurance and Occupational Pensions Authority to the ICS project.

European stakeholders engaged in the ICS project should also ensure that the ICS does not:

  • Create competitive disadvantages for Europe vis-à-vis other jurisdictions.
  • Endanger the availability and raise the cost of products that are highly valued by consumers.
  • Threaten the ability of insurers to continue to invest in long-term economic growth.
  • Create macroprudential and financial stability risks, including pro-cyclical investment behaviour.
Published 28 August 2019