G20 urged to recognise difference between insurers, banks
International insurance trade groups have lobbied the Group of Twenty (G20) leaders at their meeting last week to distinguish between insurance and banking when formulating new policy on financial services sector regulation.
Seven international insurance groups put forward their case in a letter to G20 chairman and UK Prime Minister Gordon Brown ahead of last week’s summit in London, which included discussion on future regulation of the financial services sector.
“Insurance has a fundamentally different business model from banking,” the letter said. “While not immune to the financial crisis, with very few exceptions the insurance industry entered this crisis from a position of relative strength.
“It is therefore important that solutions devised to solve problems in the banking industry are not automatically applied to insurance.”
Groups to endorse the letter included the Association of British Insurers, the American Council of Life Insurers, the European Insurance and Reinsurance Federation and the Insurance Bureau of Canada.
The leaders were urged to consider regulation that is closely attuned to risk, encourages healthy competition, promotes international trade, and supports “the crucial role insurance companies play in making stable long-term investments in economies around the globe”.
The groups pledge their willingness to work with governments, regulators and agencies to improve financial services sector regulation, and call for an end to ‘siloed’ national systems of insurance regulation, stating that “fragmented regulatory structures around the globe need to be overhauled to prevent regulatory protectionism”.
The associations recommend the existing International Association of Insurance Supervisors as the ideal international standard-setter and mechanism through which solvency standards should be developed and applied.
Seven international insurance groups put forward their case in a letter to G20 chairman and UK Prime Minister Gordon Brown ahead of last week’s summit in London, which included discussion on future regulation of the financial services sector.
“Insurance has a fundamentally different business model from banking,” the letter said. “While not immune to the financial crisis, with very few exceptions the insurance industry entered this crisis from a position of relative strength.
“It is therefore important that solutions devised to solve problems in the banking industry are not automatically applied to insurance.”
Groups to endorse the letter included the Association of British Insurers, the American Council of Life Insurers, the European Insurance and Reinsurance Federation and the Insurance Bureau of Canada.
The leaders were urged to consider regulation that is closely attuned to risk, encourages healthy competition, promotes international trade, and supports “the crucial role insurance companies play in making stable long-term investments in economies around the globe”.
The groups pledge their willingness to work with governments, regulators and agencies to improve financial services sector regulation, and call for an end to ‘siloed’ national systems of insurance regulation, stating that “fragmented regulatory structures around the globe need to be overhauled to prevent regulatory protectionism”.
The associations recommend the existing International Association of Insurance Supervisors as the ideal international standard-setter and mechanism through which solvency standards should be developed and applied.