Prime Minister Kevin Rudd’s weekend call for the insurance industry to face tighter regulation shouldn’t affect the local industry, according to a regulatory expert.

In a speech to the United Nations General Assembly in New York, Mr Rudd proposed extended regulatory coverage of all systemically important financial institutions to prevent financial harm to families.

“Systemically important financial institutions should be licensed to operate in major economies only under the condition they make full disclosure and analysis of balance sheet and off-balance sheet exposures,” he said.

“[These] are not just commercial banks, but can include investment banks, insurance companies, hedge funds and financial clearing houses.”

NIBA consultant John Hanks told insuranceNEWS.com.au that Mr Rudd’s comments have some validity in a worldwide context but are unlikely to result in changes to the Australian system.

“In the Australian context I can’t see much in it,” he said. “We don’t have the same quantity of subprime exposure and I would suspect mortgage insurers must meet more stringent requirements than ordinary insurers.

“I can’t see terribly much being done here, except perhaps at the margins. Basically our insurance regulation is already well and truly there, particularly since the collapse of HIH.

“We have a very robust regulatory environment.”