IAIS Head Urges Regulators to Think Internationally, and Beyond Insurance

Correction: Aug. 14, 11:34 a.m. EDT

NU Online News Service, Aug. 13, 3:04 p.m. EST

ATLANTA—Globalization has reached the insurance industry, making it increasingly important for regulators from around the world to communicate with one another to preserve markets and protect consumers, says the chairman of the International Association of Insurance Supervisors.

Addressing attendees of the National Association of Insurance Commissioners meeting here on Saturday, Peter Braumüller, chairman of the IAIS executive committee and managing director of the Austrian Financial Market Authority, says that while each nation my use different tools to regulate insurance markets, they all have the same goal.

“In the end, our job is to provide fair, open, secure and stable markets for the benefit of policyholders,” says Braumüller.

This simple mission, he notes, becomes complicated because “insurance groups come in so many shapes and sizes.”

In an environment where insurance contracts are increasingly becoming more interconnected with alien insurers, he says, regulators must “interact and cooperate more extensively.”

Underscoring this global interconnection, Braumüller cited a McKinsey study that found 33 percent of new commercial insurance business is written “outside [regulators] jurisdiction,” increasing “the need for dialogue and communication.”

“What we need is effective cross-border communication and we need to work together,” says Braumüller.

However, he says, these discussions need to go beyond insurance.

“When we speak about group supervision, we are speaking about ensuring supervisors are looking beyond the insurance entity and are looking at the group’s business,” says Braumüller, noting how some insurers, while their insurance business was secure, faced dire financial “contagion” outside of their core business affecting the health of the company during the recent economic crisis.

The willingness to share information about risk in the group, Braumüller went on to say, reflects the objectives of all insurance regulators, to pursue effective supervision while also seeking to “reap the benefits of greater efficiency.”

In his opening remarks, Kevin M. McCarty, commissioner of insurance for the State of Florida and president of the NAIC, says that the association’s members traditionally meet to discuss the regulatory framework of the U.S. insurance industry, “Today, our insurance world is growing more and more global in nature. We have to look beyond our borders to develop relationships, much like we have developed relationships with the leadership and participation with the International Association of Insurance Supervisors.”

Recognizing the need for these discussions, McCarty says the NAIC will be hosting the IAIS annual conference this fall in Washington, D.C., that will include 190 jurisdictions from around the world.

Correction: The study Braumüller cited was a McKinsey study not an IAIS study on commercial business.  

Comments

Resource Center

View All »

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Risk Management Report eNewsletter

Identify problems involving emerging risks, reinsurance, and business interruption with help from Risk Management Report - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.