What you need to know about the final Insurance Capital Standard consultation 2023

On 23 June 2023, the International Association of Insurance Supervisors (IAIS) published two documents to consult with its stakeholders on the global Insurance Capital Standard (ICS). This consultation is done before ICS as a Group-Wide Prescribed Capital Requirement (PCR) goes live at the end of 2024.

Background of the Insurance Capital Standard (ICS)

Over the past decade, the IAIS has been developing the ICS with the aim of creating a global insurance capital standard for Internationally Active Insurance Groups (IAIGs).

Revision of Insurance Core Principles (ICPs)

The consultation contains two revised ICPs.

ICP 14 (Valuation)

• ICP 14 sets out requirements for the valuation of assets and liabilities for solvency purposes
• The main change is the introduction of the concept of fulfilment value (similar to IFRS 17) for the measurement of insurance liabilities i.e. a valuation based on a risk-adjusted present value of future cashflows

ICP 17 (Capital adequacy)

• ICP 17 establishes regulatory capital resources and requirements
• The main changes are to align terminology “resolution/liquidation” across all ICPs and to deliver improved readability/consistency

Key Changes from ICS 2.0 to Candidate ICS as a PCR

HK Group-Wide Supervision (GWS) or ICS from 2025 onwards?

If you have any questions, please contact our professionals:

Francesco Nagari
Partner, Hong Kong FSI Leader
+852 2852 1977
frnagari@deloitte.com.hk

Dhiran Dookhi
Partner, Actuarial
+852 9500 9681
ddookhi@deloitte.com.hk

Brian Pak
Senior Manager, Actuarial
+852 9141 3882
bpak@deloitte.com.hk