A method proposed by European officials for evaluating insurance company solvency needs more testing, according to a study sponsored by a U.S. insurance trade group.

The study released by The Group of North American Insurance Enterprises (GNAIE), which lobbies for American interests in international accounting standards, was prepared by Ernst & Young.

GNAIE Chairman Jerry M. de St. Paer, who is senior vice president-finance, American International Group said, “If the issues raised in the study are not fully considered, we have a concern that there is potential for the total capital requirements of insurers to be inadequate for the risks they assume, not provide reasonable estimates that properly distinguish between well-capitalized companies and those capitalized at minimum levels, and provide for too much variability of results between different insurers with similar risk profiles.”

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