An insurance executives' think tank, in advance of the LondonG-20 meeting last week, wrote to finance leaders advising them thatany regulatory moves to fix the economic crisis should recognizethe difference between banks and insurers.

The Geneva Association, a global organization formed by chiefexecutives of the world's biggest insurers, sent a seven-pagefine-print letter to the G-20 finance ministers that was crammedwith recommendations and critiqued flaws it sees in the group'slatest action plan. The CEOs of 49 global insurers co-signed theletter, including Allianz, Munich Re, Swiss Re and TokioMarine.

It said that the United Kingdom, the G-20 chair, had issued aFebruary plan, shifting emphasis away from a 2008 G-20declaration–with references "to banking failures (and banks as thefocus for remedial action) [being] replaced by reference to'financial institutions.'"

"This raises concerns insofar as it risks blurring theparticular differences that exist between the various financialservices industries and could lead to confusion as to what specificactions will be directed at what specific type of institution."

Distinctions between subsectors of the financial servicesindustry "must be recognized in the work of the G-20 and nationalgovernments, as they were in the [2008] Washington declaration,"the executives wrote.

Among other points in the letter, the association mentioned thattheir industry has $18.5 trillion in assets under management, andwhile bank lending has seized up, insurance and reinsurance marketshave been operating normally.

It said that "traditional insurers are much less susceptibleto–nor may they originate–a 'liquidity panic.'"

Regarding supervision and regulation, the letter advised,"Knee-jerk reactions must be avoided and reform should focus onthose subsectors where regulatory deficiencies have beenidentified. There must be no automatic read-across of regulation tothe insurance sector."

To support resilience of insurers, the association said"government intervention should be the absolute exception (only forsystemic reasons) and accompanied with safeguards. Unfaircompetition with government money should not be allowed and openmarket access should be maintained."

The full text of the letter can be accessed at http://www.genevaassociation.org/Portals/0/G20_letter300309.pdf.