The International Association of Insurance Supervisors (IAIS) has approved its application paper on the Regulation and Supervision of Captive Insurers.
The IAIS adopted the paper at its annual general meeting on 12 November.
?It provides guidance to insurance supervisors on the application of aspects of regulation and supervision specifically relevant to captive insurers or reinsurers.
The approval of the paper further provides an update on the guidance available to insurance supervisors on the application of aspects of regulation and supervision that are specifically relevant to captive insurers or reinsurers.
The update reflects the IAIS Insurance Core Principles (ICPs) subsequent to their revision in 2011 and highlights matters specifically relevant to captive supervision.
Vermont's? Captive Insurance Association (VCIA) voiced issues with the paper in October and argued that US captives do not need broad regulation as proposed.
The VCIA said that as most captives in the US primarily insure the risks of their owners and/or affiliates and represent the lowest level of regulatory risk, it does not make sense to impose a burdensome supervisory scheme on them, particularly when their insureds can otherwise self-insure, without any regulatory authority being imposed.
The VCIA added that while it does not believe certain ICPs should apply to captives at all, its interpretation of the paper is that flexibility and discretion exist in applying them to captives.
