THE introduction of the new IAIS ICPs in October 2011 will herald a significant new step in achieving international convergence and consistency in regulatory requirements. Covering capital adequacy and internal models, enterprise risk management, investments, systems and controls, and group supervision, they will have a profound impact on both insurance supervisors and the insurance industry.

All supervisors will have to enact the requirements into their local supervisory frameworks. If they don’t, the relevant territory risks receiving an adverse finding from the IMF/World Bank who conduct the Financial Sector Assessment Program (FSAP) reviews. So, understanding the changing regulatory landscape has never been more important.

Firms that are aware of such changes and actively involved in shaping the new reforms stand to gain a competitive advantage and will be best prepared to meet the new challenges ahead. Above all, the substantial regulatory changes now being implemented will further reinforce the underlying structural changes insurers are making to their business models, particularly in regards to cultural change, improved and enhanced sophistication of tools being used for effective risk and capital management, enhancing the quality and timeliness of making better business decisions, and demonstrating the underlying value proposition to investors thereby attracting greater investment.

Regulation is clearly on the move: The challenge has been laid down to the sector as a whole. Understanding the changing regulatory landscape has never been more important. Firms that are aware of such changes and actively involved in shaping the new reforms stand to gain a competitive advantage and will be best prepared to meet the new challenges ahead.

This article is written by Rob Curtis, director of insurance at KPMG United Kingdom; David Sherwood, US head of insurance regulatory at KPMG United States; and Martin Noble, insurance senior manager at KPMG China. This article was taken from the publication Agenda magazine, April to May 2011, produced by KPMG’s Global Advisor Services Practice.

For comments or inquiries, please e-mail Roberto G. Manabat at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .