The Senate Committee on Banking, Housing and Urban Affairs considered testimony on the "serious concern" caused by an International Association of Insurance Supervisors' ("IAIS") consultative document ("ICS 2.0") on global insurance regulations and supervisory forums.
U.S. Senator Mike Crapo (R-Idaho), Chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs stated the concerns include "the proposed use of a market-adjusted valuation; use of internal models; and a lack of clarity about the processing moving forward and how outcome equivalency will ultimately be determined."
He stated that "there should be clarity about the path forward for further adjusting ICS 2.0 during the monitoring period, as well as a better understanding of how outcome equivalency will be determined."
U.S. Treasury Department Federal Insurance Office Director Steven Seitz urged the federal government to continue its participation in various international groups to ensure the U.S. insurance sector remains internationally competitive. Mr. Seitz raised additional concerns as to the construction of the Insurance Capital Standard ("ICS").
Federal Reserve Board Associate Director Thomas Sullivan asserted that ICS is based on a valuation method that would disfavor U.S. insurers. Eric A. Cioppa, on behalf of the National Association of Insurance Commissioners stated that ICS would not be a good fit for the U.S. insurance market and could undermine a firm's ability to satisfy policyholder obligations.
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