Insurers Fret about Global Risk Designation

U.S. insurance associations, including the American Insurance Association (AIA) American Council of Life Insurers and The Property Casualty Insurers Association of America are expressing concerns about  timelines for identification of globally systemically important financial institutions (G-SIFIs).

The groups sent a letter to President Obama requesting the president’s assistance with G20 leaders in efforts to de-link insurers from the from the Financial Stability Board’s (FSB) work streams on banks. In the letter the groups said they believed that insurers 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 VP and associate general counsel. “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,” added Snyder.

Adoption of a separate timeline will allow the FSB to more carefully assess and properly understand the unique business and regulation of insurance, the letter adds.