The International Association of Insurance Supervisors has presented a draft proposal for the Supervision of Internationally Active Insurance Groups, or ComFrame, with an aim to harmonize the international insurance practices on global basis.
Headquartered in Switzerland, IAIS has urged other interested parties and underwriting firms to submit their opinion over the draft by 31 August 2012.
The international insurance regulator said that the ComFrame is an integrated, multilateral and multidisciplinary framework for the group-wide supervision of internationally active insurance groups, or IAIGs, which will be applicable to all insurers and insurance groups.
The new set of rules will facilitate insurer to save billions of dollars annually, which they were bearing over inconsistent set of international underwriting rules.
The proposal, dubbed as "Basel for insurers", will define the rules pertaining to capital adequacy to corporate governance.
IAIS executive committee chairman Peter Braumüller said in the increasingly globally interconnected financial marketplace, supervisors need the ability to efficiently coordinate and cooperate across multiple borders.
"ComFrame will provide the foundation needed to effectively work together in supervising complex cross-border insurance groups and, in addition to contributing to global financial stability, will help protect the individual policyholder," Braumüller added.
The regulator has defined an "internationally active insurance group" as one which trades in at least three jurisdictions and garners at least 10% of gross written premium from overseas.
The groups must have total assets of more than $50bn, or write premiums of at least $10bn, "based on a rolling three-year average".