The International Association of Insurance Supervisors (IAIS) has released its Issues Paper on Group-Wide Solvency Assessment and Supervision (paper). The paper explores challenges arising from insurance groups, with a particular focus on intra-group transactions and gearing of capital, fungibility of capital and transferability of assets, complexity of group structures, diversity of legal and regulatory frameworks and regulatory arbitrage, and measurement of risk dependencies and aggregation of risks.

The paper proposes that in supervising insurance groups, amongst other things, regulators should ensure the soundness of each insurer, contribute to the maintenance of overall financial stability, particularly as the failure of a large group could have systemic implications, and preserve the levels of protection of policyholders within an entity.