They agreed that overall the insurance industry entered the crisis in a strong position and has shown resilience to the continuing shocks to the financial system. This resilience seen to date reflects the strength of the insurance business model and the increasing attention paid by insurance regulators to fostering risk based supervision.
Looking ahead, the global insurance industry believes that insurance regulation should therefore continue to be based on certain key principles:
* 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.
Stephen Haddrill, Director General of the ABI said: "These are difficult market conditions, but the insurance industry stands ready to work with the supervisory authorities around these principles as we believe that the maintenance and strengthening of them is the best basis for protecting policyholders on an ongoing basis."
The agreements came at the annual meeting of the International Association of Insurance Supervisors (IAIS) in Budapest, where insurance associations discussed developments affecting the industry.
