IAIS adopts Insurance Capital Standard to enhance policyholder protection

There are 59 identified IAIGs across 18 jurisdictions globally.

The International Association of Insurance Supervisors (IAIS) has adopted the Insurance Capital Standard (ICS) to enhance policyholder protection and bolster financial stability. 

The ICS establishes a globally comparable, risk-based capital adequacy measure for internationally active insurance groups (IAIGs). It constitutes the quantitative element of Common Framework for the supervision of internationally active insurance groups, 

It will also serve as a group-wide prescribed capital requirement, a solvency control level that ensures supervisors can intervene if an IAIG’s capital adequacy falls below the threshold. By ensuring IAIGs maintain adequate capital reserves, the ICS aims to protect policyholders from potential stresses and offers a standardised framework for evaluating financial soundness. 

There are 59 identified IAIGs across 18 jurisdictions globally. These groups, given their complexity and international operations, benefit from the ICS’s unified solvency supervision approach. 

To support the ICS implementation, the IAIS has released additional materials, including the ICS Calibration Document, which details the calculations for risk charges and their aggregation, and the ICS Economic Impact Assessment Report, which evaluates potential jurisdictional effects of ICS adoption. 

The IAIS has outlined a timeline for ICS implementation. In 2025, it will begin developing a detailed ICS assessment methodology, and coordinate a baseline self-assessment by members to evaluate progress toward implementation by 2026. 

Starting 2027, the IAIS will conduct detailed jurisdictional assessments of compliance. The IAIS will work closely with its member jurisdictions, providing necessary guidance and support throughout the process to ensure a smooth transition.