States and Feds Split on Major World Insurance Standards Deal
November 20, 2019 by Allison Bell
The National Association of Insurance Commissioners (NAIC) says it likes the deal “Team USA” negotiators have hammered out with the International Association of Insurance Supervisors (IAIS) over how the world’s financial services regulators will supervise insurer financial strength.
The U.S. Treasury Department’s Federal Insurance Office (FIO) says it’s already filed an official objection to the newly approved IAIS insurance capital assessment approach, Insurance Capital Standard Version 2.0 (ICS Version 2.0).
ICS Version 2.0 could create a global equivalent of the U.S. risk-based capital method for deciding whether insurers have enough of the right kinds of financial resources to make good on their benefits promises. U.S. regulators, for example, already reward insurers for holding highly rated bonds, rather than holding low-rated bonds that pay higher interest rates.