IAIS finalises comparability criteria for Aggregation Method
Basel – The International Association of Insurance Supervisors (IAIS), a global standard-setting body whose objectives are to promote effective and globally consistent supervision of the insurance industry to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders, says it has reached an important milestone in the comparability assessment project – an initiative that will ascertain whether the Aggregation Method (AM) provides comparable outcomes to the Insurance Capital Standard (ICS).
The IAIS says it has agreed on the criteria that will be used to assess whether the AM provides comparable outcomes to the ICS, following public consultation and the resolution of comments published today. This marks the finalisation of an important step for the comparability assessment project and equips the IAIS to begin the comparability assessment in Q3 2023.
“The finalisation of the comparability criteria, through a robust and transparent process, marks further progress toward our commitment to assess whether the AM provides comparable outcomes to the ICS”, said Vicky Saporta, IAIS Executive Committee Chair. “Stakeholder feedback was particularly important to ensure a broad range of perspectives on the appropriateness of the criteria, and we are pleased with the breadth of input.”
In November 2019, the IAIS says it agreed on a process and timeline for developing criteria to assess whether the AM provides comparable outcomes to the ICS. As previously communicated, it agreed on a draft definition of comparable outcomes and an overarching approach (ie areas of focus) to guide the development of high-level principles (HLPs) and criteria. Based on the draft definition and overarching approach, it developed draft HLPs to inform the criteria that will be used to assess whether the AM provides comparable outcomes to the ICS.
The association says that in March 2021, following public consultation, it agreed on a definition of comparable outcomes and six HLPs to guide the development of the comparability criteria. The IAIS began developing the draft comparability criteria in April 2021. Detailed criteria were developed for each HLP and released for public consultation in June 2022.
The IAIS says it received numerous comments as part of the public consultation on draft criteria, providing valuable input for the finalisation of the comparability criteria, spending the latter part of 2022 reviewing the feedback received and considering revisions to the draft criteria relevant to each HLP.
The association explained that work continues on this important project as it prepares for the commencement of the comparability assessment in Q3 2023, and will follow an assessment methodology, process and governance as agreed upon by it.