ABI promotes enhanced risk based supervision

The Association of British Insurers (ABI) has launch new principles aimed at protecting policyholders and ensuring enhanced risk based supervision.

The body, which represents 90% of operators in the UK insurance market, maintains that overall the insurance industry entered the credit crisis in a strong position.

It attributes this to the sound business models found in the global insurance sector and the increasing attention paid by regulators to fostering risk based supervision.

Following an agreement reached at last week’s annual meeting of the International Association of Insurance Supervisors, the ABI has reported that the global insurance sector believes that regulation should continue to be based on certain key principles as follows:

The insurance industry shares the regulators’ objective of protecting policyholders.

International insurance companies should be regulated with enhanced cooperation amongst supervisors and group-wide supervision.

Supervisory authorities should strengthen their ability to cooperate in identifying emerging problems and in using their existing powers in an efficient and appropriate way to safeguard policyholders and beneficiaries.

The insurance industry encourages the continuing trend towards risk-sensitive regulation. The level of prudential requirements should reflect the level of risk and diversification.

The insurance industry believes that regulation should encourage competition.

ABI director, Stephen Haddrill, adds that while market conditions are difficult, the insurance industry believes that the maintenance and strengthening of these principles is the best basis for protecting policyholders on an ongoing basis.

Tags: ABI News, Association of British Insurers, International Association of Insurance Supervisors, policyholders, principles, protect, risk based supervision

Category: ABI News, Insurance News