U.S. insurance company trade groups have sent a letter to President Obama requesting his assistance with G20 leaders in efforts to de-link insurers from the timelines for identification of globally systemically important financial institutions from the Financial Stability Board’s (FSB) work on banks.
The insurers believe that they should be separately considered from banks and after banking regulatory issues have been resolved.
“Regulatory and business models for insurers conducting regulated business did not cause the financial crisis and do not pose a systemic risk,” said David Snyder, AIA vice president and associate general counsel of the American Insurance Association. “There are distinct differences between banking and insurance models. More layers of regulation are not justified because the existing insurance system continues to work well. One of the greatest risks for insurers is over-regulation.”
The letter to Obama was signed by American Council of Life Insurers, the American Insurance Association, the Property Casualty Insurers Association of America and the Reinsurance Association of America along with groups from other countries including Canada, Britain, Mexico, Ireland and Brazil.
The insurers argue that adoption of a separate timeline will allow the FSB to more carefully assess the unique business and regulation of insurance. They are requesting that a broader community of policymakers and supervisors be included in the decision-making process for the insurance sector going forward.
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