US Insurance Groups Frustrated Over Lack of Access to ICS Talks, IAIS Response to Input
March 30, 2015 by Thomas Harman, associate editor, BestWeek: Tom.Harman@ambest.com
PHOENIX – U.S. insurers can voice their opinions to the International Association of Insurance Supervisors about its international capital standards proposal, but they appear to be frustrated over the issue of access to IAIS talks and a lack of response to suggestions.
Questions about access and quality of discussions with stakeholders came up during the National Association of Insurance Commissioners’ Spring National Meeting on March 28. The IAIS issued its ICS last fall, setting a 2016 deadline to finalize the document and a 2018 adoption date.
The IAIS also issued a policy that took effect Jan. 1 that allows stakeholders to attend meetings where regulations are being negotiated only when necessary in order to provide comment on specific issues (Best’s News Service, Nov. 16, 2014). In January, it adopted a policy for consultation of stakeholders stating that “at least once a year, the Executive Committee shall invite stakeholders to an open dialogue to discuss relevant substantive issues.”
IAIS Deputy Secretary General George Brady III told a heavily attended session of the NAIC’s International Relations Committee that comments can be made during a series of stakeholder meetings throughout the remainder of the year. Those meetings are scheduled for May 6 in New York; May 12 in Tokyo, Aug. 4 in Basel, Switzerland and Oct. 5, also in Basel. He said there would be two days of open meetings June 18-19 in Macao, China, that mark a good chance for stakeholder dialogue with the IAIS Executive Committee.
Brady told Best’s News Service that some negotiators want to bring what he described as “fundamental questions” to the Executive Committee, questions that are more properly addressed at IAIS committee meetings. He said the IAIS prefers to keep “big picture” issues for the Executive Committee.
U.S. industry and regulators have repeatedly voiced frustration about transparency and the ability to gain access to discussions.
Dave Snyder, vice president of international policy at the Property Casualty Insurers’ Association of America, told the panel that the IAIS process “gives the appearance of transparency without transparency.” He said that any final IAIS product without true transparency would be inferior and urged IAIS to review its procedures and to reconsider its meetings rules.
He told Best’s News Service that unlike NAIC, interested parties are barred from work sessions and are only permitted in if they are invited in as guest experts. Interested parties are only guaranteed input at the beginning of a work stream and at the end when there is a formal consultation. The latter case, he said, is often meaningless, because decisions are usually made at that point. Before the new meeting restrictions took effect, industry and consumers could attend working meetings and contribute to the debate, which Snyder said resulted in balanced products.
Closed meetings rules, Snyder said, potentially result in less workable products and even opposition when they are to be implemented in the U.S., because of the limited input during development.
Michelle Rogers, director of financial and regulatory policy at the National Association of Mutual Insurance Companies, told Best’s News Service said there appears to be little action by IAIS after stakeholders provide their points of view. “The amount of time provided to stakeholders for interaction is adequate, but the stakeholder meetings do not result in a problem-solving interaction between the IAIS committees and the stakeholders,” Rogers said. “They tend to be just an information exchange.”
Rogers said that while she does not feel ignored, “I don’t feel as though the issues we are raising are being answered or incorporated into the ICS dialogue, except through the U.S. regulators involved in the IAIS committees.”
While some U.S. industry and regulators hinted of indications that the IAIS might push back its time lines for ICS implementation, Brady told Best’s News Service that IAIS was “keeping the time line.”