Southampton, Bermuda--U.S. insurance regulators must stop playing "protectionist games" with reinsurance and act in a manner consistent with doing business in a global industry, Lloyd's Chairman Peter Levene said yesterday.
But, Lord Levene was at a loss to come up with a way to make U.S. regulators move more quickly on an issue that has been a high priority for Lloyd's for several years--the reduction of collateral requirements for foreign reinsurers.
U.S. regulators have been saying for five years that the issue is high on their agenda. "They can't keep playing games," Lord Levene said. "It is protectionist. It is wrong. It is unjustified."
Lord Levene made his comments in an interview during the World Insurance Forum in Bermuda.
"You can't have a task force which takes five years to do nothing. It's just unacceptable," he said, referring to the National Association of Insurance Commissioners unit which has been debating the issue.
Rather than having foreign reinsurers post collateral equal to 100 percent of their liabilities, Lord Levene advocates a system in which such requirements are eliminated if the reinsurers are regulated and the regulators in countries in which they're domiciled are deemed acceptable.
"Every other country in the world does that," he said, referring to a system of regulatory reciprocity.
"No other country in the world has 50 regulators," he added, noting that he doesn't have any particular issue with the existence of 50 regulators in the United States. But they must "act in a manner that is compatible with what is a global industry. They're not doing that."
"I think the way it's being handled is quite wrong. And the speed with which they're doing it is glacial."
Regulators from the United States, Bermuda and Europe are scheduled to address the issue during a session to be held later today.
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