Although the NAIC has issued a report praising the adoption of changes which are meant to protect U.S. interests in the negotiation of global insurance capital standards with the International Association of Insurance Supervisor’s (IAIS) the U.S Treasury has expressed dissatisfaction with the proposal.
The Treasury Department and the Federal Insurance Office have objected to the IAIS’ proposal to advance Version 2.0 of the standards into a five year monitoring period. Treasury believes that U.S. insurers should not be forced to participate in the IAIS Version 2.0, which is based on the European Union Solvency II approach, since it is not expected to apply in the U.S. and does not fit U.S. markets. They contend that its application could risk limiting U.S. consumer’s access to long term care products.
ICS Version 2.0, launches in January and while the IAIS cannot force carriers operating in the United States to abide by these standards, it may be able to enforce Version 2.0 on U.S. insurers selling their products globally. Both the NAIC and Treasury have indicated that they will continue to cooperate in the international project and accept those proposals that are in the best interest of U.S. consumers and insurers.
For any additional information regarding the IAIS agreement, or any other compliance needs, please contact Westmont Associates, Inc.