Host Rob Chaplin and Skadden colleague Caroline Jaffer debut the first episode of a yearlong series on global prudential solvency requirements, which will form the basis of the forthcoming Encyclopaedia of Prudential Solvency publication. In this episode, they discuss the International Association of Insurance Supervisors’ (IAIS’) December 2024 adoption of the Insurance Capital Standard (ICS), which Rob notes is a “watershed moment” in global insurance regulation. Rob and Caroline outline key components of the IAIS and the ICS, as well as detail what supervisory authorities and internationally active insurance groups (IAIGs) can expect next regarding the ICS.

🗝️ Key Points 🗝️ 

Top takeaways from this episode

• The IAIS’ Regulatory Standards: The IAIS adopts three tiers of regulatory standards: Insurance Core Principles (ICPs), the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) and policy measures for global systemically important insurers.
• The Insurance Capital Standard (ICS): Adopted by the IAIS in December 2024, the ICS is a measure of capital adequacy for IAIGs. It is made up of three components:  valuation, capital resources and capital requirements.
• What’s Next for the ICS?: In 2025, the IAIS will begin developing a detailed ICS assessment methodology, which it will use to determine implementation, with in-depth targeted jurisdictional assessments targeted for 2027.

💡 Meet Your Host 💡

Name: Robert Chaplin

Title: Partner, Insurance at Skadden

Specialty: Rob primarily focuses on transactional and advisory work in the insurance sector. He advises on mergers and acquisitions, disposals, joint ventures and strategic reinsurances. He also counsels on regulatory issues, with an emphasis on Solvency II. 

Connect: LinkedIn  

💡 Featured Guest 💡

Name:  Caroline Jaffer

What she does: Caroline has extensive experience working on insurance matters and liaising with regulators in the U.K. and internationally, having practiced in the U.K. and the Middle East.

Title: Caroline is an associate in Skadden’s Financial Institutions Group.

Words of wisdom: “When setting out how insurers should value their assets and liabilities, supervisory authorities should adopt a regulatory standard at least as stringent as Market-Adjusted Valuation (or MAV).”

Connect:  LinkedIn 

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The Standard Formula is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.