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Significant New International Capital Requirements Announced for Global Insurers, with Potential Impact on M&A Activity
9 October 2015
View Client Update
The International Association of Insurance Supervisors (“IAIS”) has announced the details of the new “Higher Loss Absorbency” (“HLA”) requirements applicable to the largest global insurers (“G-SIIs”).
The HLA is expected to increase G-SIIs capital requirements by approximately 10%, compared to the Basic Capital Requirement (“BCR”).
The HLA will apply to all group activities, with capital requirements expected to increase by up to 18.75% in some non-traditional areas.
The new standards are likely to lead to an increased level of downstream M&A, as insurers attempt to lessen the impact of the requirements.
Eric R. Dinallo
E. Drew Dutton
Thomas M. Kelly
Gregory J. Lyons
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