The Organisation for Economic Co-operation and Development is increasing its surveillance of reinsurance companies in response to concerns that the financial health of the industry is endangering the whole global insurance industry.

An agreement signed in Paris lat week says the OECD’s 30 member countries – including Australia – will improve transparency and “protect the integrity” of the insurance market by exchanging information on reinsurers that may have found their way around tighter regulations being introduced around the world.

National supervisory authorities will investigate fraud and financial insolvency in the reinsurance industry in a bid to ensure risks taken on in the recent past don’t cause a massive dislocation in the industry.

The OECD said some insurers and reinsurers have expanded into the risky but profitable area of credit risk. Corporate collapses like that of Enron have raised fears the level of credit risk taken on by the industry isn’t known or understood by many national regulators. The OECD will co-ordinate the program through its website.