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The LIAJ's Comments on the IAIS Public Consultation Document "Risk-based Global Insurance Capital Standard Version 1.0"

20 October, 2016

The Life Insurance Association of Japan, LIAJ (Chairman: Akio Negishi, President of Meiji Yasuda Life Insurance Company) submitted its comments on the IAIS Public Consultation Document "Risk-based Global Insurance Capital Standard (ICS) Version 1.0" on 19 October 2016.

The IAIS has been working on the development of international capital standards for insurers, and published the Consultation Document and Technical Specifications for ICS Version 1.0 in July to invite comments from stakeholders.

Among the many questions included in this Consultation Document, we have provided comments on all of the key questions, based on our idea that the ICS should appropriately reflect characteristics of the life insurance business.

We have also made comments on following points, which we believe to be of great importance when developing the ICS:

  • Consideration should be given to the potential impacts of the introduction of the new capital standard on markets and real economies.
  • Risk characteristics of each jurisdiction and insurer should be appropriately reflected.
  • The use of internal models and transitional arrangements should be flexibly considered.
  • Consideration should be given to the potential impacts of using economic value-based indicators as a trigger for interventions.
  • Further discussions are needed to ensure the new capital standard would not discourage life insurers' long-term management (such as the provision of long-term coverage and long-term stable provision of funds).

The LIAJ's Comments on the CD "Risk-based Global Insurance Capital Standard Version 1.0"PDF