The IAIS is seeking feedback on these options in order to inform an upcoming field-testing phase and to further support the design and development of the BCR. A second public consultation is planned in 2014 after the BCR is further developed and defined.
In July 2013, the IAIS released its assessment methodology and policy measures for G-SIIs. The IAIS’ framework of policy measures consists of three main types of measures, including Higher Loss Absorption (HLA) Capacity. As announced in July, as a foundation for HLA requirements, the IAIS will as a first step develop BCR to apply to all group activities, including non-insurance subsidiaries.
The development of the BCR is the first step of a long-term project to develop risk-based, group-wide global capital standards. The second step is the development of HLA requirements to apply to G-SIIs, due to be completed by the end of 2015. The HLA will build on the BCR and address additional capital requirements for G-SIIs reflecting their systemic importance in the international financial system. The final step is the development of a risk-based group-wide global insurance capital standard (ICS), due to be completed by the end of 2016. The BCR will also inform development of the ICS.
The IAIS has endorsed three substantive principles to guide the development of a “factor-based” BCR and to provide a high-level framework against which the final design will be considered. These principles are:
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that major risk categories should be considered,
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there is comparability of outcomes across jurisdictions, and
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the BCR has resilience to stress.
The consultation will continue through 3 February, 2014.
Press release
© IAIS - International Association of Insurance Supervisors
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