2009-04-01

By Editor, CIR

Changes to financial services regulation are needed, but new rules applied to banks should not be extended automatically to insurers, states a letter addressed to G20 leaders meeting at a summit in London.

The letter is from the Association of British Insurers, Association of Bermuda Insurers and Reinsurers, American Council of Life Insurers, Canadian Life and Health Insurance Association, Dublin International Insurance and Management Association, the European Insurance and Reinsurance Federation, and the Insurance Bureau of Canada.

Addressed to Gordon Brown, as chairman of the summit, the group says that insurance market participants are ready to work with governments, regulators and other agencies to improve financial services regulation, but stresses that the insurance market functions differently from banking.

''While not immune to the financial crisis, with very few exceptions, the insurance industry has entered this crisis from a position of relative strength. It is therefore important that solutions devised to solve problems in the banking industry are not automatically applied to insurance,'' the letter states.

It adds that the financial crisis evidences the need for regulators to use a risk-based supervisory approach.

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