Washington D.C., July 18, 2013 - The IIF supports the work of policymakers to contain systemic risk and foster stability of the global financial system. As (re-)insurers provide important benefits to the economy as shock absorbers and long-term investors, any policy measures for designated systemic firms need to be targeted to their business model and ensure a level playing field.

The IIF and its insurance members have acknowledged the releases by the Financial Stability Board (FSB) and the International Association of Insurance Supervisors (IAIS) announcing a list of nine Global Systemically Important Insurers (G-SIIs) as well as a policy framework to address systemic risk in insurance.

Mr. Tim Adams, President and CEO of the IIF, stated: "Insurers provide important benefits to the economy - as shock absorbers and long-term investors - and as a source of financial stability. In this regard, adequate size and global activity of an insurer allows it to better pool risks, thereby contributing to the stability of the system. The new policy framework created to contain systemic risk should continue to be refined to be tailored to the intrinsic and particular characteristics of the insurance industry."

Mr. Martin Senn, Chairman of the IIF Insurance Regulatory Committee, a member of the IIF Board of Directors and CEO of Zurich Insurance Group, noted: "The IIF supports policy makers' goal of ensuring the safety and soundness of the global financial system, which is critical to investors, consumer confidence and sustainable growth. It is important, however, to aim for a policy framework that only assesses systemically risky activities and preserves, in form and substance, the policymakers' finding that traditional insurance activities are not a source or an amplifier of systemic risk."

While supporting the efforts to contain systemic risk in the financial sector, IIF members encourage policy makers to consider further refinements to the methodology to identify G-SIIs. In regard to the development of a straightforward, backstop capital requirement to apply to all group activities, it is fundamental that the appropriate framework to be developed is adequately tailored to the specifics of the business model of insurance. Any recommendation by national or international regulators that certain insurers hold higher levels of capital should consider the impact on consumers, including the impact on price and availability of certain products. Further, the framework should properly recognize sound risk management practices of individual firms.

The IIF continues to underscore the importance for any policy measures to be aimed at promoting a level playing field in global insurance markets. Therefore, it is essential for measures to be implemented in a cross-border consistent manner, preventing fragmentation and uncoordinated approaches and avoiding weakening the stabilizing role of international insurance groups in the global economy.

The Institute supports the emphasis of the new framework on comprehensive group supervision for global insurance groups and believes it should be the primary tool to address potential systemic risk in insurance. Such an approach should allow supervisors to monitor all group-wide activities on a consolidated basis and to detect and adequately mitigate potentially systemic relevant activities.

The IIF and its members look forward to continuing the constructive dialogue with the FSB and IAIS on the further development of the G-SII framework and its consistent application to (re-)insurance, given the shared objective of greater stability and resilience of the global financial system.