IAIS Opens 2026 ICS Baseline Self-Assessment Across 18 Jurisdictions

From mapping the Aggregation Method to Insurance Capital Standard reference capital across three large US internationally active insurance groups during the monitoring period, the chokepoint was never the headline metric levels. It was how affiliated reinsurance and private credit netting decisions diverge under the two lenses. The International Association of Insurance Supervisors has now opened the first baseline self-assessment of how its members are implementing the ICS, covering 59 identified Internationally Active Insurance Groups across 18 jurisdictions. The 2026 self-assessment produces the reference point for 2027's targeted jurisdictional reviews, and it is the moment where the NAIC's Aggregation Method has to demonstrate "comparable outcomes" in public rather than in principle.

For actuaries working at IAIGs, the practical question that arrives with this self-assessment is which internal capital metrics start moving onto board reporting decks this year, and which should still be explained as parallel views rather than primary numbers. The broader strategic question is whether the Aggregation Method that the NAIC spent a decade building can carry the weight of being the US's comparable-outcomes measure when the IAIS Reference Group, EIOPA peers, and the Bermuda Monetary Authority start examining the inputs in detail.

The Framework in One Paragraph

The IAIS adopted the ICS as a group-level prescribed capital requirement in December 2024, closing a development process that began after the financial crisis and ran through a five-year monitoring period. The ICS is a market-consistent measure calibrated to a 99.5 percent value-at-risk over a one-year horizon, with a group-level balance sheet constructed on a largely market-consistent basis. Alongside the ICS, the NAIC's Aggregation Method was developed as an alternative measure intended to be assessed as producing "comparable outcomes" to the ICS, based on the existing US state-level Risk-Based Capital framework aggregated across the group. The ICS is the global reference; the AM is the US track. The 2026 self-assessment is the first structured supervisory comparison of how members are implementing each, and the AM comparability assessment on a parallel track is scheduled to reach finalization during 2027.

Timeline: 2026 Self-Assessment, 2027 Targeted Reviews, AM Comparability

The IAIS work plan published after the December 2024 adoption laid out a multi-year implementation cadence. The 2026 baseline self-assessment is the first formal milestone. Member jurisdictions receive a structured questionnaire covering the legal basis for ICS implementation, the scope of group supervision, the valuation and capital requirement methodology, governance and supervisory review, and transitional arrangements. Jurisdictions respond on a prescribed timeline running through the second half of 2026, and the IAIS Secretariat aggregates the responses into a baseline report.

The 2027 targeted jurisdictional assessments take the baseline report and drill into specific implementation questions. Targeted assessments use a smaller supervisory team, site visits where appropriate, and detailed review of selected IAIG group supervisory files. The output is a set of findings and recommendations, both jurisdiction-specific and thematic, that feed back into the IAIS Implementation and Assessment Committee work plan.

The Aggregation Method comparability assessment runs on a parallel but distinct track. The NAIC submitted its candidate AM methodology and calibration proposals during the monitoring period, and the IAIS Reference Group has been reviewing the submission through an agreed set of comparability criteria. The finalization schedule contemplates a determination during 2027, with formal IAIS membership votes following the Reference Group's recommendation. If the AM is assessed as producing comparable outcomes, US IAIGs continue to be regulated on the aggregated RBC basis with supervisory college interactions calibrated around the AM. If the AM is not assessed as comparable, the NAIC faces a choice between accepting gaps in the current framework and building additional overlays to close them.

The sequencing matters because the 2026 self-assessment is where peer supervisors first see the AM applied to live IAIG data alongside the ICS. Theoretical comparability arguments during the monitoring period were based on simulated portfolios and stylized sensitivity testing. The 2026 self-assessment is the first time that the actual capital positions of the large US IAIGs get compared against the reference ICS view in a structured supervisory setting. The 2027 targeted review and the comparability finalization are the downstream consequences.

The 59 IAIGs and the 18 Jurisdictions

The IAIS identifies IAIGs using a two-part test: total assets above USD 50 billion or gross written premium above USD 10 billion, combined with material international activity across at least three jurisdictions. As of the most recent IAIS list, 59 groups meet the criteria. The jurisdictional distribution is approximately as follows, based on public disclosures and home-supervisor assignments during the ICS monitoring period:

United States (Aggregation Method track). Roughly one-third of the IAIG population, including MetLife, Prudential Financial, AIG, Chubb, Travelers, Allstate, Hartford, Lincoln National, Liberty Mutual, New York Life, and several PE-affiliated retirement services platforms that meet the IAIG thresholds through their US anchor entities.
European Economic Area (Solvency II home supervision). The largest single continental contingent, with groups including Allianz, AXA, Generali, Aegon, NN Group, Munich Re, Hannover Re, SCOR, Mapfre, and CNP Assurances. Solvency II already provides a market-consistent group capital framework, and the EEA IAIGs' ICS reporting piggybacks on the Solvency II infrastructure with adjustment layers.
United Kingdom (post-Solvency II regime). Aviva, Legal & General, Prudential plc, Phoenix Group, M&G, and Lloyd's-related corporate groups where applicable. The UK's post-Brexit Solvency II reforms produce additional divergence from the ICS that the self-assessment has to document.
Japan (Insurance Business Act framework). Nippon Life, Dai-ichi Life, Meiji Yasuda Life, Sumitomo Life, Tokio Marine, Sompo Holdings, and MS&AD, with the Japanese Financial Services Agency running the home supervision. Japan's Economic Solvency Ratio framework, which the FSA has been building out, provides a domestically consistent market-consistent measure that the ICS can be mapped against.
Bermuda (EBS framework). Several standalone Bermuda-headquartered platforms and retirement services groups whose parent IAIG classification sits in Bermuda, with the BMA running the home supervisor role. The Economic Balance Sheet framework is already market-consistent at the legal entity level, and the group-level application is the IAIS-compatible piece.
Switzerland, Canada, Australia, Bermuda, China, Korea, and additional markets. The remainder of the 18 jurisdictions includes Zurich, Swiss Re, Manulife, Sun Life, Great-West Lifeco, IAG, Suncorp, Ping An, China Life, China Pacific, Samsung Life, and several additional groups meeting the IAIG criteria with non-Western home supervisors.

The jurisdictional distribution matters because the ICS implementation landscape is not uniform. EEA, UK, Swiss, and Bermuda IAIGs report under frameworks that already produce market-consistent group capital measures broadly aligned with the ICS architecture. US IAIGs report under the AM, which is architecturally different. Japanese IAIGs report under a framework that is converging toward market-consistent but has not fully arrived. The self-assessment's baseline will surface these structural differences, and the 2027 targeted reviews will prioritize the jurisdictions where the gap between the ICS reference view and the implemented approach is largest.

Aggregation Method vs. ICS Reference: Where They Diverge

The headline numbers from the AM and the ICS reference capital can look similar for a given US IAIG. The divergence shows up in the internal composition of the number and the sensitivity to specific balance-sheet structures. From working through the comparison on actual IAIG balance sheets, three areas produce the most consistent divergence:

Private Credit and Structured Credit Look-Through

The ICS calibration uses a look-through approach to structured credit, with the capital charge driven by the underlying collateral rather than the credit rating of the wrapper. The AM relies on NAIC designations sourced through the Securities Valuation Office and NRSRO ratings, with bucket-level capital factors applied to the designation. For a CLO equity tranche, a rated note feeder, or a bespoke asset-backed finance position, the two approaches can produce materially different capital charges. The AM tends to produce a lower charge on privately rated structures that carry investment-grade designations; the ICS look-through tends to surface the underlying collateral risk directly.

The practical result is that IAIGs with meaningful allocations to private structured credit inside the US life or annuity subsidiaries can show AM ratios that look comfortably above thresholds while the ICS reference view produces a tighter position. The divergence is not evidence that either framework is wrong. It is a calibration difference that the comparability assessment has to address explicitly, either by adjusting the AM inputs, by layering a US-side overlay for structured credit concentration, or by documenting the difference and arguing that it does not breach the comparable-outcomes standard.

Affiliated Reinsurance and Intra-Group Cessions

The ICS group view consolidates affiliated reinsurance as an intra-group arrangement with limited capital relief beyond the asset diversification that the consolidated group genuinely holds. The AM, because it aggregates solo RBC across the group, tends to give effect to affiliated reinsurance at the legal-entity level first and aggregates the post-reinsurance positions. Where a US cedent has ceded material blocks to an affiliated Bermuda or Cayman reinsurer, the AM view may reflect the cession's capital benefit more directly than the ICS view, which eliminates the intra-group recoverable and re-derives the consolidated capital requirement.

This is the area where the monitoring-period comparison exercises produced the sharpest divergences on specific IAIGs. The IAIS 2026 FundedRe and complex assets workstream, which runs alongside the ICS calibration, puts this divergence at the center of the global supervisory agenda. The self-assessment and the 2027 targeted review are the structured settings where the divergence becomes part of the public comparability record.

Illiquidity Premium and Discount Rate Assumptions

The ICS constrains the illiquidity premium that can be applied to the discount rate on long-duration insurance liabilities, with the constraint tied to the actual liquidity profile of the backing assets and the predictability of liability cash flows. The AM inherits the US statutory reserving framework, where cash flow testing under ASOP 7 and the specifics of principle-based reserving produce a different set of discount rate mechanics. The end-result dollar figures can converge, but the path to them differs, and the sensitivity to market stress can differ as well.

NAIC Group Capital Calculation as the AM Foundation

The AM's implementation for US IAIGs runs through the NAIC Group Capital Calculation, the aggregated group-level RBC measure that US state regulators have been building out for several years. The GCC aggregates solo-entity RBC across the group, with adjustments for non-insurance entities, permitted practices, and affiliated transactions. Two recent GCC-adjacent workstreams feed directly into the AM's credibility.

Investment Subsidiary and Collateral Loan RBC

The NAIC's Risk-Based Capital Investment Risk and Evaluation Working Group has been updating RBC factors for collateral loans, CLO equity and mezzanine tranches, and investment subsidiaries. Each adjustment tightens the C-1 capital charge on the asset classes where the AM's current calibration shows the widest divergence from the ICS look-through. The direction of travel is toward closing the gap from the US side without formally abandoning the NAIC designation architecture. The 2026 GCC filings will incorporate the most recent RBC factor updates, and the self-assessment will examine whether the updated factors are sufficient to support the comparability argument.

Group Capital Calculation for Non-IAIG Groups

The state-level GCC adoption has now reached most US states as an accreditation standard, covering non-IAIG insurance holding company groups as well as the IAIG population. The broader adoption matters for the AM story because it demonstrates a functioning group supervision framework in the US, which is a threshold question that peer supervisors consistently raise. If the GCC were operating only for IAIGs on an ad hoc basis, the argument that the AM produces reliable group capital measures would be weaker. With the GCC operating as a standard supervisory tool across the US life and P&C group universe, the AM inherits operational credibility that is hard to replicate in a purely IAIG-specific framework.

Bermuda EBS and the US State-Level GCC in the IAIS View

The IAIS self-assessment has to reconcile three US-anchored regulatory layers that interact for groups with Bermuda reinsurance subsidiaries: the state-level GCC for the US operating holding company, the BMA's Economic Balance Sheet framework for the Bermuda reinsurance legal entity, and the AM for the IAIG group supervisory view. Each layer has a different valuation basis, a different capital calibration, and a different supervisory focus.

The BMA's EBS framework, updated through 2026 refinements, is substantively market-consistent at the legal-entity level. For an IAIG with a Bermuda reinsurance subsidiary, the EBS view of the Bermuda entity typically aligns more closely with the ICS reference view than the US aggregated RBC view does. This creates an internal tension for the AM: the portion of the group that sits in Bermuda is already effectively running on an ICS-aligned framework, while the portion that sits in the US operates on the aggregated RBC framework. The AM comparability argument at the group level has to explain how the combined position produces a comparable outcome even though the components use different valuation conventions.

For US actuaries at IAIGs with Bermuda subsidiaries, the practical implication is that the Bermuda-side capital reporting is already close to what the ICS reference view would ask for, and the work to close the group-level comparability picture falls mostly on the US-side reporting. The BMA's strategic positioning on private credit and cross-border reinsurance is consistent with this direction. Bermuda is not the jurisdiction that has to defend its framework against the ICS; the US is.

Swiss Re, Zurich, and the Currency Question

The Swiss IAIGs illustrate a separate thread that the self-assessment will surface. The Swiss Solvency Test is already a market-consistent framework and has been for longer than Solvency II or the ICS. The Swiss IAIGs' self-assessment responses will document how the SST maps to the ICS, which for most dimensions is a close alignment. The one area that has produced ongoing complexity is reporting currency and the treatment of cross-currency balance-sheet positions.

As we noted in our Swiss Re AGM USD pivot analysis, the decision to report primary financial statements in US dollars has downstream effects on how capital positions get presented to international supervisors and investors. The ICS specifies reporting in a consistent currency framework, and IAIGs with meaningful cross-currency asset and liability positions have to document how the currency translation interacts with the capital requirement calibration. Swiss IAIGs are in front of this question because of the SST's maturity; other jurisdictions will hit the same question as the ICS application tightens.

Dual-Reporting Implications for 2026 Year-End

For actuarial teams at IAIGs, the 2026 self-assessment produces a short list of concrete tasks that should be on the year-end work plan now, not in the final quarter.

Reconciliation Schedules Between AM and ICS Reference Capital

Build a documented reconciliation between the AM figure that goes into the US supervisory process and the ICS reference capital figure that the group has been producing during the monitoring period. The reconciliation should identify each line item where the two measures diverge, quantify the dollar impact, and explain the driver. This is not a new exercise for most IAIGs that participated in the monitoring period, but the 2026 self-assessment raises the stakes because the reconciliation moves from an internal model validation artifact to a document that may be shared with supervisors and, in aggregate, with peer jurisdictions.

Illustrative ICS Disclosures in Year-End 2026 ORSA

Consider adding illustrative ICS reference capital disclosures to the year-end 2026 ORSA filing. The NAIC's ORSA template allows for forward-looking risk assessment disclosures, and an illustrative ICS view sits naturally within that framework. The benefit is two-fold: the actuarial team builds the muscle memory of producing the ICS view as a regular output rather than a one-time exercise, and the ORSA filing documents to the lead-state regulator that the IAIG's group-level capital story is coherent under both lenses. This is a voluntary step, not a requirement, but the IAIGs that take it first position themselves as operationally ready for whatever the 2027 comparability determination produces.

Private Credit Look-Through Model Build

Build a look-through credit model for the private structured credit positions that drive the largest divergence between the AM and the ICS reference view. The model should produce, for each position, both the NAIC-designation-based RBC charge and an ICS-look-through-equivalent charge. The gap is the AM-to-ICS divergence for that position, and the aggregate across the portfolio is the headline sensitivity. This model is useful even independent of the self-assessment because the same look-through logic applies to the C-2 longevity risk RBC framework and the parallel RBC factor updates.

Affiliated Reinsurance Consolidation View

For IAIGs with material affiliated reinsurance, build the consolidated view that eliminates the intra-group recoverable and re-derives the group capital position on a consolidated basis. This mirrors the ICS group methodology and produces the number that the self-assessment and any follow-on targeted review will examine. The quantification should be in the year-end 2026 capital planning documentation, with a narrative that explains the strategic rationale for the affiliated reinsurance structure and the offsetting supervisory controls that the group operates.

Governance and Board Reporting Alignment

Review the board-level risk and capital reporting package for alignment with the ICS reference metrics. Most IAIG boards see AM-based or jurisdiction-specific capital measures as the primary reference. The 2026 self-assessment is a natural trigger to introduce parallel ICS reference metrics to the board package, with commentary that explains the divergence from the primary US or jurisdictional measure. The purpose is not to displace the primary measure but to build board familiarity with the number that will anchor international supervisory conversations from 2027 onward.

The Political Economy of the Comparability Assessment

The AM comparability determination sits inside a political economy that the self-assessment will influence but not determine. The European supervisors that were skeptical of a US-specific alternative measure during the ICS development period have become more vocal through 2025 and 2026, partly because the European market has absorbed material cross-border cessions to US and Bermuda affiliates and wants an even playing field on the capital treatment of the resulting structures. The BMA, which has been building its own credibility through the EBS refinements and the asset-intensive reinsurance reflections, has an interest in a comparability outcome that preserves Bermuda's ability to compete globally while not undercutting the IAIS framework. The NAIC, as the US lead, has to defend the AM as a legitimate alternative while acknowledging the areas where US state-based RBC calibration lags the global standard.

The Mayer Brown NAIC Spring 2026 International Insurance Relations Committee update captured the state of the conversation at the late-March Spring National Meeting. The Aggregation Method Implementation Working Group agenda includes calibration refinements, data-submission templates for US IAIGs, and engagement protocols with the IAIS Reference Group. The substantive work is active; the open question is whether the calibration refinements arrive quickly enough and at sufficient granularity to hold the comparability line in 2027.

What Consultant Memos Are Missing

Most consultant memos on the 2026 self-assessment treat it as a compliance checkbox. The memos describe the process, note the timeline, and recommend that IAIGs engage with their home supervisors and the IAIS consultation process. That framing understates the strategic significance. The self-assessment is the first public data exercise where the AM's "comparable outcomes" claim stops being theoretical. Peer supervisors, EIOPA commentary, and the IAIS Secretariat can examine the inputs, compare them to the ICS reference view, and flag divergences that the NAIC then has to respond to.

The actuarial read is that this is where the comparability story starts carrying quantitative weight. The IAIGs that prepare for the self-assessment as a substantive analytical exercise, with internal reconciliations that can withstand peer supervisor scrutiny, are in a different position from those that prepare for it as a documentation compliance task. The difference is not visible in the self-assessment itself; it shows up in the 2027 targeted review, where IAIGs with robust internal reconciliations can explain their positions confidently and those without find themselves defending ad-hoc answers under supervisory pressure.

Why This Continues a Pattern

This continues a pattern visible across the 2026 IAIS, BMA, and NAIC agendas. The IAIS FundedRe workstream extends supervisory visibility into asset-intensive cross-border structures. The BMA EBS refinements tighten the prudential treatment of complex assets at the legal-entity level. The NAIC AG 55 filings build the data layer for US asset-intensive disclosures. The Group Capital Calculation builds the US group-level framework. The ICS 2026 self-assessment sits above these workstreams as the structural capital lens that ties them together. Each piece on its own is incremental. Together they describe a supervisory architecture that is materially more integrated across jurisdictions than it was even two years ago.

For the appointed actuary at an IAIG, the consistent message is that the internal capital reporting framework needs to carry both the US-anchored view and the ICS reference view as co-primary lenses. The choice is not between one or the other; it is about building an internal operating rhythm where both views are available, reconciled, and explained in the same sentence when the board, the supervisor, or the investor asks.

The Bottom Line

The 2026 baseline self-assessment is the first structured comparison of ICS implementation across the 59 IAIGs in 18 jurisdictions. For US IAIGs, it is the moment where the Aggregation Method's comparable-outcomes claim starts being tested in public against the ICS reference view. The divergences that matter live in private credit and structured credit look-through, affiliated reinsurance consolidation, and discount rate and illiquidity premium assumptions. The NAIC's Group Capital Calculation and the parallel RBC factor updates are closing the gap from the US side, but the gap is not yet closed, and the 2027 targeted jurisdictional assessments and AM comparability finalization will examine the residual divergence in detail. The actuarial teams that prepare dual-lens internal reconciliations now, embed illustrative ICS disclosures in the year-end 2026 ORSA, and build the look-through credit and affiliated reinsurance consolidation models into the capital planning process are positioning their groups for an outcome in 2027 where the comparability determination is handled as a familiar conversation rather than a late-stage reconciliation exercise.