Global insurance regulatory body IAIS has decided to develop a risk-based global insurance capital standard by 2016 and plans to complete implementation in 2019 following testing and refinement with supervisors and internationally active insurance groups (IAIGs).
The regulator has increased the map of capital standards to 40 more insurance companies across the globe, to enable them to pile up additional capital to deal with economic uncertainties in the future.
As per the proposed plan, the new capital rule will be applicable to insurance firms that have total assets of at least $50bn or write premiums worth at least $10bn a year, or write premiums in at least three countries.
The new proposal comes three months after nine insurers, including Allianz, Prudential and Metlife, were termed systemically important, and asked to increase capital buffers.
IAIS executive committee chair Peter Braumüller said, "It is undeniable that the business of insurance is global, and global issues demand global responses."
IAIS technical committee chair Michael McRaith commented, "From the financial crisis, we learned that our global financial regulatory regime should be more robust and comprehensive in scope, and jurisdictions should share a commitment to global standards."
Founded in 1994, the IAIS represents insurance regulators and supervisors of over 200 jurisdictions in nearly 140 countries, constituting 97% of the world’s insurance premiums.