The International Association of Insurance Supervisors (IAIS) has issued three guidance papers on solvency assessment (papers). The papers identify key features which the IAIS encourages supervisors to consider using in their solvency regimes to establish and maintain well-regulated insurance industries. These features include quantitative and qualitative aspects of solvency assessment and provide guidance to supervisors in relation to the structure of regulatory capital requirements, enterprise risk management for capital adequacy and solvency purposes, and the use of internal models for risk and capital management by insurers.

The papers are designed to enhance transparency and comparability of supervisory practices, which gives effect to IAIS’ long term objective of facilitating improved convergence towards a globally accepted risk-based solvency assessment regime for insurers. The papers will serve as a foundation on which high-level principles-based solvency assessment standards will be developed. The IAIS is also planning further work in relation to the valuation of assets and liabilities and the determination of capital resources for solvency purposes. These measures are designed to expand the suite of documentation of solvency assessment, and aim to contribute towards promoting efficient and well-regulated insurance markets worldwide, and ultimately support the preservation of global financial stability.