Globally systemic insurer? If Western regulators have their way, you may be able to fail, but the market can keep the derivatives contracts going for awhile.
The Federal Deposit Insurance Corporation (FDIC), together with the Bank of England, the German Federal Financial Supervisory Authority (BaFin) and the Swiss Financial Market Supervisory Authority (FINMA), wrote a joint letter to encourage the global trade association chair, Stephen O’Connor of the International Swaps and Derivatives Association, Inc. (ISDA), to help adopt language in derivatives contracts to delay the early termination of those instruments should a globally systemic important financial institution (G-SIFI) fail.
Because derivatives oversight is still largely unmoored from straight regulation, the industry is the tail wagging the dog of the banking authorities.
U.S. insurers deemed GSIFIs by the G-20′s Financial Stability Oversight Council (FSOC) are Prudential Financial, MetLife and AIG. Foreign insurance companies with holdings in the U.S. include Aviva Plc, AXA and the UK’s Prudential PLC.