Insurance industry associations from around the globe agree that regulators need to increase co-operation and deliver more risk-sensitive regulation.

The Canadian Life and Health Insurance Association reports that 15 associations, representing the vast majority of the global insurance business, including North America, Europe, Asia, Australia and South Africa, presented a unified statement to the annual meeting of the International Association of Insurance Supervisors in Budapest last week.

The CLHIA says that “the statement highlights the fact that international insurance companies should be regulated with enhanced co-operation amongst supervisors using a group-wide approach to supervision. It also emphasizes the need to maintain the trend towards risk-sensitive regulation, and that the level of prudential regulation should reflect the insurer’s level of risk and diversification.”

“Insurance associations around the world wanted to make a clear statement to regulators about the need for a common approach to the regulation of insurance companies. This is the first time that insurance associations have come together in such numbers to take a common position,” said Frank Swedlove, president of the CLHIA.

The group also noted Canadian life and health insurers are sound and well capitalized. “With assets of more than $430 billion in Canada, minimal exposure to distressed asset classes and a comparably more robust Canadian market than elsewhere in the world, Canada’s life and health insurers rank among the strongest financially both nationally and internationally, and are well positioned to meet their obligations to their policyholders despite the current market turmoil,” it said.

IE