PCI Responds to FSB G-SII Designations and IAIS Policy Measures

DES PLAINES, Ill., July 18 -- The Property Casualty Insurers Association of America issued the following news release:

The Property Casualty Insurers Association of America (PCI) issued the following statement in response to the Financial Stability Board's (FSB) vote to designate certain insurance companies as Global Systemically Important Insurers (G-SIIs) and the International Association of Insurance Supervisors (IAIS) methodology and policy measures.

"PCI appreciates that the FSB implicitly recognized that the vast majority of insurance companies are not systemically important by designating as G-SIIs only a very small number of insurance companies. PCI also commends the IAIS for taking a clear and final position that the traditional insurance business model does not pose systemic risk," said David Snyder, PCI's vice president, international policy.

"International insurance regulators through the IAIS have concluded again that neither the short nor long-term experience of insurance markets, including during the global financial crisis, provides any evidence that traditional insurance generates or transmits systemic risk in the financial system or the real economy. The potential for systemic risk arise only from non-traditional or non-insurance activities. And IAIS stated that traditional property and casualty activities do not give rise to systemic risk.

"Before the policy measures are imposed on the few designated G-SIIs, we urge a careful re-evaluation of the systemic risk issue in the context of U.S. developments to ensure that the benefits of any additional regulation far exceed their costs and that good companies are not harmed." said Snyder. He added "In this connection, we strongly support the interest among members of Congress for representatives of the U.S. engaged in international regulatory issues to coordinate closely and adhere to principles that benefit, not harm, healthy, competitive U.S. insurance companies, our regulatory system and insurance markets both here and abroad."

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