SEATTLE–U.S. and European insurance regulators need to work on communications, according to industry experts.
The experts talked about communications barriers here at the summer meeting of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., during a panel discussion sponsored by the American Insurance Association, Washington.
Dave Snyder, an AIA vice president, said the value of insurance trade between the United States and the rest of the world is over $100 billion, which makes ironing out regulatory issues between parties critical.
The Dodd-Frank Wall Street Reform and Consumer Protection Act recently created a Federal Insurance Office (FIO) at the U.S. Treasury Department.
The creation of the FIO, which will represent the United States in international insurance matters, is major step toward accomplishing that goal, Snyder said.
George Brady, international counsel for the NAIC, called the FIO “our friend,” saying its creation is a great opportunity to resolve differences.
Regulators often mix the need for financial oversight over the banking industry with insurance, and there must be constant vigilance in efforts to keep oversight over insurance separate from oversight over banking, Brady said.
Yoshihiro Kawai, secretary general of the International Association of Insurance Supervisors (IAIS), Basel, Switzerland, said one of the lessons from the financial crisis has been
the need for Europe and the United States to develop a common regulatory language. He said the issue goes beyond the method of communication to the language of communicatio.
The language of communication is “fundamental to cooperation between global markets,” Kawai said.
Hannah Grant, policy advisor for international affairs and reinsurance at the European Insurance and Reinsurance Federation (CEA), Brussels, talked about the European Union’s recent adoption of the Solvency II insurance regulatory requirements.
Europe is feeling very positive about its new regulatory authority, and officials there believe Solvency II gives more structure to its underpinnings, Grant said.
Europe and the United States need more dialogue to increase the level of commitment and understanding, Grant said.
European regulators have not granted the United States equivalency because of differences between the U.S. and European regulatory systems, Snyder and Brady said.
Snyder said efforts to address those differences are continuing, with some difficulty.
“We are fixing a plane as we are flying in it,” Snyder said.