Insurers to the G-20: We're Not Banks

framework, which is aimed at an adequate level of policyholder protection, works well in most jurisdictions,” insurers say.

Emphasizing principles and risk management, rather than adherence to static rules and formulas, should give regulators the ability to deal with concerns about insurer systemic risk using a range of measures other than simply resorting to higher capital requirements, insurers say.

The groups signing the letter include the American Council of Life Insurers, Washington; the American Insurance Association, Washington; the Association of British Insurers, London; the Association of Bermuda Insurers and Reinsurers, Hamilton, Bermuda; the Brazilian Insurance Confederation, Rio de Janeiro; the Canadian Life and Health Insurance Association, Toronto; the Dutch Association of Insurers, The Hague, Netherlands; the European Insurance and Reinsurance Federation, Brussels; the General Insurance Association of Japan, Tokyo; the Insurance Bureau of Canada, Toronto; the Insurance Council of Australia, Sydney; the Life Insurance Association of Japan, Tokyo; the Property Casualty Insurers Association of America, Des Plaines, Ill.; and the Reinsurance Association of America, Washington.

In addition to discussing capital requirements, the insurers also discuss what they see as being other strengths in the world insurance regulatory system.

Insurance regulators, for example, already have mechanisms in place for winding down insurers in an orderly fashion, and regulators should give due consideration to those mechanisms before imposing new resolution frameworks, insurers say.

Insurers also say that it is unnecessary to make insurers contribute to a fund that would pay for the future resolution of an insurer, because insurers are less likely than banks to be the recipients of future government help.