At last week's annual meeting of the International Association of Insurance Supervisors (“IAIS”) in Amsterdam, regulators focused on several issues critical to global and large domestic insurers:
- Firm-wide capital requirements were finalized for the largest insurers, with debate now focused on new global rules to be adopted for a larger group of insurers by the end of 2016. Of particular concern, particularly for U.S. insurers, is whether the IAIS will use a market based valuation approach, which may add volatility to existing capital requirements.
- Global insurer resolution planning requirements are taking shape. These are likely to extend to insurers other than global systemically important insurers.
- Regulators expect firm-wide corporate governance.
Industry participants discussed the substantial effort required to implement these and other regulatory directives and the impact that they would have on deal, capital raising and other major initiatives, with private equity providing a possible exit from businesses or assets no longer viable in the new regulatory landscape.