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PCI, NAMIC Request Senate Hearing on Global Capital Standard

Two property/casualty insurance trade organizations are calling on the U.S. Senate to investigate efforts to impose global capital standards on insurance companies despite objections from state regulators in the United States...
April 30, 2014

Two property/casualty insurance trade organizations are calling on the U.S. Senate to investigate efforts to impose global capital standards on insurance companies despite objections from state regulators in the United States. Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC) requested the Senate Banking Committee conduct a hearing to “explore the impact on our consumers and markets that would result from the ongoing work of the International Association of Insurance Supervisors (IAIS) in establishing quantitative capital standards for internationally active insurers.”

The two trade organizations said the IAIS is proceeding toward a “one-size-fits-all” capital standard over the objections of state regulators. PCI and NAMIC argue that would run afoul of the Dodd-Frank Act, because the law says that unless a company is designated as a systemically important financial institution or operates in a thrift holding company structure, the state-based system of insurance regulation—including risk-based capital requirements—will continue to apply. IAIS is also developing a global capital standard for internationally active companies that are not designated systemically important. Connecticut Insurance Commissioner Thomas Leonardi recently told Best’s News Service that he does not think anyone has adequately explained what regulators are trying to solve by establishing a global capital standard.

PCI-NAMIC Letter (4/24/14)

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