In an open letter to British Prime Minister Gordon Brown, released at the European Insurance Forum in Dublin, a number of the world’s leading insurance organizations urged him to recognize that “insurance has a fundamentally different business model from banking.”
As a result they reminded him, “as Chair of the G-20 Summit,” that it’s important that the “solutions devised to solve the problems of the banking industry are not automatically applied to insurance.”
The letter was signed by the following Organizations: The Association of British Insurers (ABI); the Association of Bermuda Insurers and Reinsurers (ABIR); the American Council of Life Insurers (ACLI); the Canadian Life and Health Insurance Association (CLHIA); Dublin International Insurance & Management Association (DIMA); the European Insurance and Reinsurance Federation (CEA), and the Insurance Bureau of Canada (IBC).
The letter urged Brown to consider three main principles during the discussions.
“First, we believe the global financial crisis has made clear the need for regulators to converge on a risk-based approach to their supervisory activities.
“Secondly, recent events have raised awareness of the hazards of not properly monitoring international groups and the systemic risks associated with them. The inconsistency of having a globalized insurance industry on the one hand and a ‘siloed’ national approach to regulation on the other must be reconciled.”
Finally the letter said: “We also believe that, at a time when countries around the world are considering changes to existing regulations or implementing new regulations in response to the global financial crisis, immediate steps should be taken to stop the spread of trade protectionism.”
Source: DIMA – www.dima.ie
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