Moves are underway to establish cross-market regulatory standards for international insurers and more formal links among regulators from different countries.

James Schacht, national director, insurance regulatory practice, Coopers & Lybrand USA, told the Reinsurance Congress that the International Association of Insurance Supervisors (IAIS) was formally created in 1992 as a voluntary association of insurance regulators throughout the world.

Their objectives included: Non-mandatory regulatory standards; Training and education; Cooperation and exchange of information; A forum for discussion and repository of information; Just, fair and efficient insurance markets; and, Liaison with other international organisations of financial institution regulators.

The IAIS held its fourth annual conference in Sydney in September and established broad principles and standards of insurance supervision.

The group adopted principles applicable to international insurers and guidance on regulation for emerging market economies.

Mr. Schacht said, "There's also a permanent secretariat in Switzerland established. It is the former German insurance supervisor who has taken on that role. With that permanent full-time person in place, and presumably at least a small, full-time staff to follow, the activity of this group will become even more robust, more active as to the activities they undertake and the principles and standards they establish.'' He said that IAIS also had underway a memorandum of understanding that provided for an exchange of information among member countries and sought the improving cooperation among regulators. Mr. Schacht said, "The offshore supervisors, the supervisors of the industry in the Caribbean and the Channel Islands have been meeting for some time now and they have established their own set of principles as to how the industry should be regulated.

"Their particular emphasis is on the criteria that ought to be applied to the people who are responsible for running these insurance companies.

"They are also looking at other standards with regard to capital, reinsurance and other things, and the establishment of a central reporting system, a centralised data base.

"And when you think back not too many years ago about these countries and the secrecy that prevailed in many of them, this is a remarkable thing that is occurring with regulators in those areas of the world.'' Mr. Schacht advocated that all regulators should have access to an international database for the exchange of information. He noted that it would require action on the part of the various governments to change laws and make it a reality.

He seeks a focus by insurance receivers on the issues and complexities of the hypothetical failure of an international insurer.

But he expressed concern for the lack of participation by US regulators in the IAIS, stating that most of the energy for the group had been generated from the Australian insurance commissioner.

He complained that the US needed to address the fact that with a globalisation of markets, the US had to be further opened to facilitate the entry by international insurers.

He said international insurers wanting to do business in the US must deal with entry into each state separately, having to deal with 50 insurance commissioners.

BUSINESS BUC