The chairman of the AXA Group cautioned international and U.S. regulators and legislators not to place insurers in the same category as other troubled financial institutions suffering through the current financial crisis.
As policymakers move to make sweeping reforms of the regulatory framework, it is crucial that their initiatives be grounded in sound regulatory principles, said Henri de Castries, chairman of AXA's management board, adding that the current crisis underlines "the absolute necessity of a swift adoption of Solvency 2."
Mr. de Castries made his comments as chairman of the Pan European Insurance Forum (PEIF), a group of major European insurance companies, in a report issued today in Paris. The report, "Insurance View: Regulatory Consequences of Financial Crisis," focuses on the regulatory consequences of the financial crisis.
He said the European Union's regulations based on a fundamentally new risk approach of supervision for cross-border groups are "clearly more adapted to current financial circumstances."
"Stakeholders reacting to the financial crisis need to take into account that the business model of the insurance industry differs substantially from that of the other financial services providers," he said.
He added that "insurers do not generate the kind of systemic risk that arises in banking."
The study recommends that the new legislation should be" targeted, balanced and calibrated according to the expected impact it will have on the economy."
"It should safeguard the level playing field and further enhance global consistency," the study says. The paper also recommends "enhancing" the execution of existing regulations.
Besides AXA, members of the PEIF include Aegon, Allianz, Aviva, Generali Group, Munich Group, RSA, Zurich and Swiss Re.
Regulators in the United States, including members of the National Association of Insurance Commissioners, have been studying Solvency 2 for 18 months.
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