The head of the International Association of Insurance Supervisors IAIS) says regulators must consider the long-term nature of the liabilities that insurers face when developing standards for insurance supervision.
The Basel Committee on Banking Supervision, Basel, Switzerland, a group that serves with the IAIS on the world Financial Stability Board, Basel, has drawn attention to international financial services standards efforts by releasing the Basel III bank capital standards.
In jurisdictions that adopt the standards, banks would have to increase the ratio of common equity to risk-adjusted assets to 7%, up from a minimum of 2% today. Banks also would have to limit the value of investments in deferred tax assets, mortgage servicing rights, and stakes in insurers and other financial institutions to 15% of the common equity included in capital-to-assets ratio calculations.
IAIS Secretary General Yoshihiro Kawai says the IAIS commends the Basel Committee on the introduction of capital reforms and a global liquidity standard for banks.
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The IAIS will assess the implications of the reforms for insurance supervision, Kawai says.