Kl Agreement Iais
The letter calls for decisions on key aspects of the CSI to be made prior to the adoption of ICS 2.0 to ensure that convergence and agreement within the supervisory authority are possible. The next five-year observation period should highlight and, if necessary, address potential deficiencies in the information and control services sector. The agreement on a timetable and approach to the implementation of the CIS is an important achievement for IAIS, given the magnitude and complexity of the differences between the different judicial approaches to insurance capital and, in some cases, the diametrically opposed positions of key stakeholders on fundamental valuation and methodology issues. However, the agreed-upon approach of the IAIS does not resolve some of the most controversial issues and what emerges from Kuala Lumpur generally seems less than what the most ardent supporters of the ICS would have insisted before the conference. However, many difficult decisions or approaches need to be made during the monitoring period. Our overview is therefore that, in relation to the main unresolved issues or “tests” outlined in our latest blog – Evaluation, Internal Models and Risk Margin – IAIS has made some limited and objective progress within an agreement that broadly carries deferral and compromise characteristics. Overall, IAIS still faces a daunting task of establishing an IE system capable of achieving its objectives and implementing it in a way that provides a relevant and comparable standard beyond legal systems. The success of the project therefore still seems very unresolved and is certainly not an obvious conclusion. Nevertheless, the single path of IAIS convergence offers a fixed, albeit much broader, timetable for completing the development phase of the ICS project. The next round of field trials will be decisive in completing most of the outstanding issues of the standard ICS approach to provide an appropriate basis for the confidential communication phase that will follow. Ted Nickel, the insurance commissioner for the state of Wisconsin, said Thursday`s IAIS announcement was made by “a lot of give-and-take” and that he was looking forward to being part of the important work ahead.