The Reinsurance Advisory Board (RAB) has responded to the UK House of Lords’ Industry & Regulators Committee call for evidence into commercial re/insurance regulation, emphasising that open reinsurance markets are vital to enable the insurance sector to operate efficiently.
The RAB also noted that it’s essential that the markets are able to diversify risk globally and to promote the continued growth and resilience of global and national economies.
Any barriers to trade in reinsurance undermine the efficiency of re/insurance markets and lead to higher reinsurance costs and less insurance capacity in the long-term.
According to the RAB, as a cross-border, business-to-business activity, reinsurance should receive special, fit-for-purpose treatment in regulation.
The board believes that reinsurers who are undertaking in a country that’s been deemed equivillant should only be subject to limited UK regulation, with respect to the local UK branch activities.
The board noted that the markets need an appropriate regime governing the activity of branches of foreign re/insurers is key to maintaining and promoting the UK as an internationally competitive re/insurance hub, that being said, the RAB has welcomed the recent equivalence decisions in respect to EEA jurisdictions granted by HM Treasury.
