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We've given the industry, including the insurersimmediately affected, an opportunity to sound off on the FSB'sdesignation of G-SIIs, and on how the IAIS plans to develop newcapital requirements for this group.

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We'll keep adding to the list as we keep getting statementsand comments on what this means for the insurance industry.

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You can read the story HERE.

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Click “Next” to begin reading the statements from industryofficials, insurers and other stakeholders…

DavidSnyder

vice president, international policy

The Property Casualty Insurers Association of America

PCI appreciates that the FSB implicitly recognized that the vastmajority of insurance companies are not systemically important bydesignating as G-SIIs only a very small number of insurancecompanies. PCI also commends the IAIS for taking a clear and finalposition that the traditional insurance business model does notpose systemic risk.

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International insurance regulators through the IAIS haveconcluded again that neither the short nor long-term experience ofinsurance markets, including during the global financial crisis,provides any evidence that traditional insurance generates ortransmits systemic risk in the financial system or the realeconomy. The potential for systemic risk arise only fromnon-traditional or non-insurance activities. And IAIS stated thattraditional property and casualty activities do not give rise tosystemic risk.

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Before the policy measures are imposed on the few designatedG-SIIs, we urge a careful re-evaluation of the systemic risk issuein the context of U.S. developments to ensure that the benefits ofany additional regulation far exceed their costs and that goodcompanies are not harmed.” said Snyder. He added “In thisconnection, we strongly support the interest among members ofCongress for representatives of the U.S. engaged in internationalregulatory issues to coordinate closely and adhere to principlesthat benefit, not harm, healthy, competitive U.S. insurancecompanies, our regulatory system and insurance markets both hereand abroad.

Leigh Ann Pusey

president and CEO

American Insurance Association

AIA has repeatedly stated its view that the insurance businessmodel and the regulated insurance activities that flow from thatmodel do not pose a systemic threat. To the contrary, the insurancebusiness model possesses features that add stability to thefinancial markets. Property-casualty insurer operations are fundedby upfront premiums, which reduces the need to access the creditmarkets. Because the risks that a property-casualty insurer assumesare typically not correlated, an insurer is not prone to a customer'run' on the company's assets and consequently, can better controlits outflows. This low leverage environment ofproperty-casualty insurers is a key element ofstability.

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While the IAIS acknowledges the low potential for systemic riskfrom regulated insurance activities, we remain concerned with thedesignations and the methodology that produced the designations fora few reasons. First, since the global methodology wasdirected solely at insurers, the criteria compared insurers to oneanother, rather than all other types of financial institutions. Asa result, we are not confident that the process yielded resultsbased on objective 'systemic risk' criteria. This has also ledto artificial distinctions in the methodology between 'traditional'and 'nontraditional' types of insurance activities that may not bebased on systemic risk and may unfairly stigmatize those types ofinsurance that are deemed nontraditional. Second, AIA remainsconcerned that such a 'ranking' of insurers overemphasizes size,despite the IAIS methodology limiting size to 5% of the designationdetermination. Third, for those designated as G-SIIs, the IAISplans to now develop backstop group capital requirements that willbe applied on a global basis. If companies are incorrectlydesignated as G-SIIs, application of heightened capital standardscould end up either harming their ability to compete or couldunintentionally lead to the type of systemic threat that the FSBand IAIS are trying to avoid.

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The reliance on additional capital as a regulatory first step –rather than a measure of last resort - should be subject tothoughtful and serious debate about (1) the role of capital in theinsurance business, (2) respect for local jurisdictional standards,and (3) the preservation of private market competition across theglobe. As the IAIS goes on to develop a 'quantitative capitalstandard' as directed by the FSB, AIA will continue to work withthe IAIS and national and international regulatory regimes toresolve this critical debate in a way that protects insuranceconsumers, leads to efficient and effective supervision, andadvances competition.

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John H.Fitzpatrick

secreatry general

The Geneva Association

The Geneva Association recognizes the importance of creating amore stable financial system and supports the G20-led efforts toaddress systemic risk. Based on research undertaken since 2009, TheGeneva Association has advocated that an activities-based approachand a clear focus on systemically risky activities be at the heartof the process. The IAIS has reconfirmed the importance of anactivities-based approach in its recommended consequences andmeasures.

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Fitzpatrick: “The Association's research suggests thatstrong lead supervision of an insurance group can be more effectivethan higher loss absorbency (HLA) in addressing systemic risk. Thatsaid, any 'backstop capital requirement' needs to be tailoredspecifically for the insurance business model and care taken toavoid creating new competitive issues.”

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Thomas B.Leonardi

Connecticut Insurance Commissioner

Represents state regulators in the Financial StabilityCommittee at the IAIS on behalf of the FSB

The National Association of Insurance Commissioners

The National Association of InsuranceCommissioners recognizes the important work being conducted bythe Financial Stability Board to address systemic threats tothe global financial system. Nevertheless, we are concerned thatFSB's identification of globally systemically importantinsurers today is premature to the extent it relies solely onthe work of the International Association of InsuranceSupervisors.

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The IAIS agreed on a quantitative methodology which produces arelative ranking of firms based on metrics thought to be relevantfor determining systemic importance. However, in our view, theanalysis conducted to date by the IAIS is not sufficient by itselfto draw the conclusion that any or all of the firms on the list areGSIIs.

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Further, we continue to believe that traditional insuranceactivities are not systemically risky. Therefore, we urged that acomprehensive comparison of GSIIs with proposed systemicallyimportant banks be conducted to assess the threat posed bypotential GSIIs relative to financial firms in other sectors. Inother words, understanding whether the most systemically riskyinsurer (by virtue of its nontraditional or noninsuranceactivities) is still less risky than the least systemically riskybank, is relevant before making a designation and recommendingadditional requirements that will bifurcate the market.

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Despite having the largest number of GSIIs within ourjurisdictions, U.S. state insurance regulators have little insightinto the deliberations at the FSB, so it is unclear whether otherinformation beyond the IAIS work was considered. Mitigatingsystemic risk is an objective all financial regulators share, butgiven the impact of this effort on financial firms and theircustomers and the potential for an unlevel playing field inotherwise competitive and healthy insurance markets, it isimportant to get this right.

Dieter Wemmer

CFO

Allianz SE

Even though we continue to be of the opinion that the insurancebusiness in general and Allianz in particular does not represent asystemic risk, we acknowledge the decision of the FSB and willcontinue to support its efforts for more stable financialmarkets.

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Allianz enjoys a widely diversified, resilient business model, avery solid capital base and sustainable profitability. Therefore,we are well positioned to manage the new requirements thisdesignation will lead to regardless of the specific form theytake.

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Assicurazioni Generali acknowledges that it has beendesignated by the Financial Stability Board as a SystemicallyImportant Financial Institution due to the size of itsnon-insurance activities. Any potential impact of this designationon Generali is yet to be determined and will apply in 2019.

Traditional insurers – such as Generali – are an agent ofstability for the whole economy and act as shock-absorbers, as theyrun their business with a typical long-term approach. Generali hasa stated strategy of narrowing its business focus onto coreinsurance activities, and disposing of non-core assets.