Insurers warn of ICS threat to long-duration contracts

Implied credit charges could triple under one approach being field-tested by regulators

Insurers say proposals would artificially inflate long-term liabilities

Long-dated insurance obligations could see a threefold increase in implied credit risk charges under one of the approaches for valuing liabilities being field-tested by international standard-setters.

US insurers say one of the possible approaches for valuing liabilities in the latest version of the global insurance capital standard (ICS) artificially inflates liabilities and results in significantly higher capital charges – especially for long-duration products, such as whole-life insurance