The United States could improve how it spots and prevents risksin the financial system from turning into destabilising crises, aglobal regulatory task force said on Tuesday.

The Financial Stability Board (FSB) said the world's topinsurance market could also streamline supervision of the sector bycentralising powers currently held at state level.

The FSB coordinates financial rules for the world's top 20economies (G20) and will update leaders next month on progress inmaking financial systems safer and less likely to need taxpayerbailouts for banks again in future crises.

The watchdog said in its review of certain new U.S. rules thatthe United States has a complex and fragmented supervisorystructure with many state and federal regulators.

But the new U.S. Financial Stability Oversight Council (FSOC),set up to spot broader risks regulators across the world missedahead of the 2007-09 financial crisis, "represents a reasonableapproach" to coordinated oversight, the FSB said.

FSOC, like the European Systemic Risk Board and theFinancialPolicy Committee in Britain, are a new breed of so-called"macroprudential" watchdogs tasked with sniffing out housingbubbles and other risks before they get out of control.

But FSOC's broad membership might affect its ability to actquickly and more clarity is needed on how it operates so that itbecomes "greater than the sum of its parts", the FSB said.

"While the risks or threats to financial stability are alreadyidentified in FSOC annual reports, those risks are not analysed indetail and are not prioritised in terms of their significance ortheir immediacy," it added.

The FSB also has concerns over how U.S. insurers are supervisedby a "multiplicity of state regulations" and that reforms such assetting up the Federal Insurance Office, don't go far enough asmost powers are still held at state level.

"The U.S. authorities should carefully consider and providerecommendations to Congress as to whether migration towards a morefederal and streamlined structure may be a more effective means ofachieving greater regulatory uniformity," it added.

Checks are also needed to see if insurers hold enough capital toback their life insurance products, the FSB said.

The U.S system for capitalising insurers made it difficult forinvestors to compare risks across the sector or with internationalrivals, the review, chaired by Andreas Dombret of the Bundesbank,added.

A U.S. Treasury spokeswoman said that as a member of the FSB, itwelcomed the review.

"We agree with the findings that the establishment of theFinancial Stability Oversight Council, the Office of FinancialResearch and Federal Insurance Office represent important steps toenhance stability of the financial system," she said.

The review said the United States has made "substantial"progress in strengthening oversight of systemically importantfinancial market infrastructure such as clearing houses.

All G20 members are committed to having their financial systemsreviewed regularly by their peers.