Regulators are planning to hit nine of the biggest insurance companies with new safety rules which are tougher than the industry expected. The proposals are estimated to increase the capital requirements for unexpected losses by 10 percent on average.
Insurers have attacked the plans of the G20’s Financial Stability Board, which oversees the new regime for global “systemically important” insurers, arguing that AIG – the insurance company that was rescued by the US government in 2008 – ran into trouble because of reasons unrelated to traditional insurance operations and hold that they shouldn’t be treated like banks.
While waiting for a paper, which is to be published on Monday and quantifies the capital requirements designated, eight of the nine insurers that are to be affected made a joint submission to the regulators saying that the capital requirements are unlikely to contribute to financial stability.
These measures come after Insurers in Europe have already prepared for new capital requirements under the EU’s Solvency II regime.
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