Geneva Association formerly requests G-20 recognize insurers as distinct from banks

The Geneva Association, an international insurance sector think tank, is asking the G-20 to formally recognise that traditional insurance activities do not give rise to systemic risk.
In an open letter to the finance ministers of the G-20 states, the Geneva Association has asked the G-20 to “state clearly that any non-core insurance activities will be dealt with bearing in mind the particular business model and role of insurance while also taking into account regulation already in place or about to be introduced.”
The letter goes on to say simplistic regulatory answers – in particular, a direct and crude transfer of banking regulation into the insurance sector – will impair the insurance industry’s capacity to play its economic role.
The current monetary policy of central banks, intended to help the recapitalization efforts of banks, has eroded insurers’ investment income, the Geneva Association added.
“A yield reduction of 100 basis points is estimated to reduce investment income for the global industry by approximately $226 billion per annum. It would be very unfortunate if the healthy insurance industry would not only have to suffer in financial terms from the effects of some high-risk non-insurance activities going critically wrong in the past, but possibly also by inheriting an inappropriate approach to systemic risk.”