On October 5, 2015, the International Association of Insurance Supervisors (IAIS) announced the completion of the initial development of the HLA for global systematically important insurers (G-SIIs or Too-Big-to-Fail insurers). The HLA requirements are part of the insurer’s special case of the general policy framework for G-SIFIs developed by the Financial Stability Board (FSB).
Alongside the earlier announced Basic Capital Requirement (BCR) and BCR uplift, the HLA will form the total regulatory capital which G-SIIs will be required to hold from 2019. In summary, given the HLA the G-SIIs can face an average increase of 10% to the capital requirements; 18.5% increase for unregulated- banking activities whereas a 6% increase for traditional insurance products. Next on the agenda for the IAIS is the development of a risk-based group-wide global Insurance Capital Standard (ICS), to be adopted by the end of 2019.
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