GFIA requests IAIS study the effects of restrictions on cross-border reinsurance -- Request for initiation of an IAIS study on the effects of restrictions on cross-border reinsuranceRelease Date: 06/12/2015 Staff Reference: Janice Hilchie
To: IAIS Technical Committee
Date: 12 June 2015
Subject: Request for initiation of an IAIS study on the effects of restrictions on cross-border reinsurance
Dear Chair and Members,
The Global Federation of Insurance Associations (GFIA) represents approximately 87% of annual insurance premiums and more than $24 trillion in assets worldwide.
GFIA would like to draw the IAIS Technical Committee’s attention to a growing trend amongst regulators to require localization of reinsurance risks. In recent years, six nations have introduced requirements forcing domestic retention of reinsurance risks, thus undermining the principle of global risk diversification, ultimately harming individual policyholders and businesses, and creating fragmentation of risks for their regions.
GFIA believes this trend is a threat to the G-20 priorities, Financial Stability Board (FSB) objectives, the IAIS’ core objectives and the Insurance Core Principles (ICPs). In Annex I you will find an elaboration on how restrictions on cross-border reinsurance jeopardize said objectives. In Annex II you will find a summary of which ICPs are affected by such reinsurance restrictions.