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State Regulators Split With FIO Over Need for New Standards

The International Association of Insurance Supervisors, which met last week in Amsterdam, has released global capital standards that nine of the largest insurance companies in the world could soon be adhering to...
October 29, 2014

The International Association of Insurance Supervisors (IAIS), which met last week in Amsterdam, has released global capital standards that nine of the largest insurance companies in the world could soon be adhering to. The negotiation process for the new standards revealed a sharp disagreement between members of the National Association of Insurance Commissioners (NAIC) and the Federal Insurance Office (FIO) about the appropriate way to regulate large multi-national insurers, including whether there needs to be a global capital standard at all.

The "too-big-to-fail" companies that will be affected by the new standard include U.S. insurers American International Group Inc., Metropolitan Life Insurance Co. Inc. and Prudential Financial Inc. The IAIS is also in the process of drafting global insurance capital standards for all internationally active insurance groups. The organization plans to have that standard implemented by 2019.

The FIO has supported the IAIS' work on the capital standards in reports submitted to Congress. But a number of state regulators have joined Pennsylvania Insurance Commissioner Michael Consedine in rejecting the idea the IAIS has demonstrated the need for a global capital standard.

Regulators Split With FIO Over Need for New Standards (BestWire 10/23/14)

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