The theory of principles-based regulation sounds promising, but actual application of the concept may fall short, warned one Bermuda representative, drawing parallels to the development of risk-transfer rules for finite insurance deals.

Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers, made his assessment in response to a question during a recent joint luncheon of the Association of Professional Insurance Women and the Insurance Brokers Association of the State of New York.

A principles-based regulation system for insurance was spotlighted recently in New York when Insurance Superintendent Eric Dinallo proposed rules in his state. Mr. Kading pointed out that "if you look at the pronouncements 10 years ago on finite risk," those were principles-based.

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