Resolvable insurers cannot be Sifis
Thursday 19 January 2012 - by Patrick M Liedtke
No other topic has worried nation states around the world more persistently in 2011 than the question of global financial stability.
This creates the risk of a misunderstanding of its operations and raises the likelihood of potentially unintended consequences of a particular regulatory action. The IAIS has been charged by the FSB with dealing with the insurance aspects of the forthcoming regulatory agenda on financial stability.
Their expertise in insurance must be recognised in this process and its recommendations to other bodies need to be respected.
Over the last two years the insurance industry has worked vigorously to clarify the nature of its contribution to financial stability, proving how insurance activities are a stabilising rather than a destabilising element, and clearly demarcated itself from other financial services providers.
The Geneva Association's research has been instrumental in supporting and advancing those discussions at the international level.
Today, we are focused on examining the resolution and recovery plans that exist in insurance and will be publishing our findings on the subject soon.
It is clear from our analysis and fully consistent with the experience from the past decades that when failures of insurers occur, the recovery or resolution mechanisms and supervisory tools for insurance exist for allowing them to be managed in an orderly fashion and without systemic disruptive effects on the
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