Adoption of ICS for global insurers main regulatory change for 2025, Fitch says

Written by Adam Cadle

08/10/2024

The adoption of the Insurance Capital Standard (ICS) at the end of 2024 as a global solvency standard for internationally active insurance groups is likely the most significant regulatory development for global insurers, Fitch Ratings has stated.

The International Association of Insurance Supervisors (IAIS) is assessing the economic impact of the ICS, while the US National Association of Insurance Commissioners (NAIC) has unveiled a range of reviews for insurers with private equity links during summer 2024.

Fitch said the ICS “should lead to a closer alignment of capital standards for internationally active insurers, but there will likely remain some national differences, particularly where existing economic-capital based solvency regimes, such as Solvency II, have been implemented”.

While many jurisdictions have adopted Solvency II-like frameworks, which the ICS broadly mirrors, the US is taking a different approach – an aggregation method to calculate insurance group capital. The IAIS is evaluating whether this should be considered an outcome-equivalent approach to the ICS.

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