Lee-Ann-Pusey, AIA

The International Association of Insurance Supervisors (IAIS) has published several documents receiving a lot of attention in the insurance industry. In December, the IAIS published its “Market” report. According to Leigh Ann Pusey, President & CEO of the American Insurance Association (AIA), the report did not contain many surprises.  The IAIS put forth a “stable” outlook while acknowledging challenges, such as the role of alternative capital and reinsurance.

As a “standard-setting body”, the IAIS is focused on supervision and stability within the insurance industry, as well as a Common Framework for internationally active insurers, not to be confused with G-SIIs – Globally Systemically Important Insurers. G-SIIs are correlated to the U.S.’s SIFI designation for Significantly Important Financial Institutions.  Ms. Pusey cautions us on the maintaining the difference between systemic risk and internationally active.

The IAIS is focused on its Insurance Capital Standard (ICS) exercise, as are the U.S. and other markets.  Ms. Pusey believes the ICS will be used in the Common Framework for internationally active companies. The Basic Capital Requirement (BCR) will become the foundation for the systemically risky companies.  Meanwhile, the industry will be responding to another IAIS document related to the ICS.

According to Ms. Pusey, the U.S. is well represented in the global conversation on capital standards by “Team USA”, with the Federal Reserve and Treasury informed by State regulators. Working together “Team USA” is discerning what can be applied domestically, and globally. She believes all regulators want to implement standards “in a way that maintains a competitive playing field.”

For more information on the Joint Industry Forum, visit the WRIN.tv On Demand Library.

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