KPMG IAIG survey focuses on potential costs and benefits of global regulatory change

In December 2013, KPMG member firms conducted an online survey of internationally active insurance groups (IAIGs) on the possible costs and potential benefits of global regulatory change, in particular the development by the International Association of Insurance Supervisors (IAIS) of its ComFrame proposals.

Thirty IAIGs were invited to participate in the survey, with nearly two thirds responding.

The main findings include:

  • Eighty-nine per cent awareness among IAIGs of the IAIS ComFrame developments but only 50 per cent currently preparing
  • Good support for the development of a global prudential framework; only 35 per cent support for a harmonised conduct requirements
  • Concerns regarding an un-level playing field and regulatory arbitrage to ComFrame being duplicative and burdensome for firms
  • Clear demand from IAIGs for consistent international accounting standards and better harmonisation of legal frameworks
  • Strong support for ComFrame to be risk based and to address valuation standards — both at an accounting and actuarial level
  • Challenges in implementing a global framework centred on a lack of standard accounting practices for the valuation of assets and liabilities
  • Concern that a lack of political leadership to develop a global framework could seriously hamper international efforts
  • 61 per cent of those surveyed expect that ComFrame would result in additional costs to systems changes and capital and unlikely to result in any expense reductions
  • Most IAIGs surveyed were unable to estimate their current regulatory resourcing costs
  • Support for a single group-wide supervisor in both Europe and the US markets