Insurance industry systemic risk should be regulated at the federal level, a team of actuaries says.
The Financial Regulatory Reform Task Force at the American Academy of Actuaries, Washington, come to that conclusion in a report prepared to tell policymakers how task force members view regulation of insurance company risks that might be big enough to threaten the stability of the financial system.
“The task force supports the establishment of a federally based systemic risk regulator,” the actuaries write in their report. “The roles and responsibilities of the SRR should be consistent for all sectors of the financial services industry.”
U.S. insurers face both insurance risk and capital markets risk, the actuaries write.
“While the insurance industry did not generate systemic risk during the latest crisis, the task force recognizes the importance of a system that would monitor any development of insurance-related risk on a nationwide basis,” the actuaries write.