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Regulators positive on harmonising reinsurance rules

LONDON, January 27 (Global Risk Regulator) – Proposals for more harmonised and standardised international supervision of reinsurers have had a positive response from insurance industry regulators, say the authors of a report produced by the Group of Thirty (G30) leading figures in global finance.

The report on reinsurance and the financial markets by a study group of the influential Washington-based G30 urges a better articulated and more consistent approach to regulating reinsurers. Reinsurance – insurance for insurers – is often little understood in the wider financial community, the report acknowledges.

The study group strongly recommends that supervisors world wide adopt a regulatory approach that reviews the condition and activities of reinsurance groups on a consolidated basis, using risk-based capital standards.

Such an approach would help establish balanced competition in the international reinsurance market, Alastair Clark, an adviser to the governor of the Bank of England and co-chairman of the study group, told reporters in London earlier this week. Informal soundings of regulators had produced generally positive responses to the proposals, Clark told a press conference hosted by the UK central bank.