LONDON (Reuters) – Traditional reinsurance poses no threat to global financial stability, but the industry should still be closely watched because of its peripheral involvement in potentially risky activities, regulators said on Wednesday.
“Similar to primary insurance, traditional reinsurance is unlikely to cause, or amplify, systemic risk,” said Peter Braumueller, head of the International Association of Insurance Supervisors (IAIS).
The IAIS' conclusions could help reinsurers win exemption from capital charges being discussed by regulators striving to prevent a rerun of the 2008 crisis, when a series of banking failures paralyzed financial markets and slashed economic growth.
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