IIF Responds to IAIS Stock-take Questionnaire on Infrastructure and Strategic Equity 

On September 7, the IAIS issued a stock-take questionnaire on infrastructure and strategic equity that is designed to elicit comment on whether there should be a differentiated capital treatment of certain eligible infrastructure and strategic equity investments within the Insurance Capital Standard (ICS). The IIF responded to the questionnaire on December 2, 2020 with the following key points: 

• The IIF supports the interest of the IAIS in further studying the proper risk-based treatment of infrastructure and strategic equity investments and we would encourage the IAIS to extend this consideration to a broader range of assets, including equity investments in general. We would also encourage the IAIS to consider the valuation of these assets, in addition to their treatment under prudential capital rules. 
• When properly structured and risk managed, infrastructure and strategic equity investments, as well as other equity investments, can be inflation-resilient, diversified vehicles that perform well under stress and counter procyclicality. 
• Infrastructure investments can play an important role in promoting important societal goals and these investments exhibited good resiliency during the financial crisis of 2008. 

As part of our response to the IAIS, we provided supporting materials and data sources to assist the IAIS in its analysis of these investments.