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LONDON, Nov 11 (Reuters) – European insurers, on the front line of the region’s sovereign debt crisis because of their big exposure to distressed Italian bonds, will be forced to share losses with customers and rely on regulators to be lenient if Italy reneges on its debt.

Doubts over Italy’s ability to service its loans this week pushed the yield on its bonds to levels seen as unsustainable, stirring fears the world’s third-biggest debtor might default, and casting a long shadow over the insurance sector.

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