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The paper provides further direction to the development of a common structure and common standards for the assessment of insurer solvency. It outlines a more precise view on a number of key elements or ‘cornerstones’ for the formulation of regulatory financial requirements for insurers worldwide. The proposed regime includes the valuation of technical provisions, assets and regulatory requirements for dealing with the risks of an insurer. The paper also flags a number of other items that will need to be addressed by the IAIS including governance, market conduct, disclosure, and group issues.
It is envisaged that a separate further ´road-map paper´, containing a proposal for a work plan and time path for the formulation of the common structure and common standards for the assessment of insurer solvency, will be circulated later this year. The road-map paper will also address the broader range of issues encompassed in the other elements of the Framework.
The IAIS expects to circulate later this year a ‘road-map paper’ containing a reasonably detailed work plan and time path for the completion of the common structure and common standards for solvency assessment now that the shape of this structure and standards are becoming clearer.
Comments should be submitted to the IAIS Secretariat by 15 April 2005
Both the framework and cornerstones papers are proposed to be adopted by IAIS members at the annual meeting in Vienna in October 2005.