The various global initiatives affecting the regulation of insurance that have emerged since the financial crisis made it vital that a global federation exist to argue the insurance industry’s side, the chairman of the newly-formed Global Federation of Insurance Associations (GFIA) has told Reactions.
“It has been a couple of years in the making and it reflects the reality that we face today,” says Frank Swedlove, newly-elected GFIA chair and president of the Canadian Life and Health Insurance Association, on the formation of the new federation.
The GFIA will be active in commenting on a broad range of issues affecting the international insurance industry, including: developments in the systemic risk debate; the work of the IAIS in developing ComFrame, the common framework for the supervision of international groups; market conduct and trade issues; and initiatives in relation to financial inclusion and anti-money laundering.
Swedlove says the focus on standard setting at an international level has been much more intense since the financial crisis. This led to the formation of the International Network of Insurance Associations a few years ago, which Swedlove describes as an “informal liaison amongst associations”. This has now developed into the establishment of a formal organisation, the GFIA.
“The insurance associations recognise that in order for them to be effective in making representations on issues it is best that they work together so that we could be more effective in getting our views known to the various international standards setters,” he says.
The GFIA has thirty-one insurance associations as members, representing 87% of the worldwide insurance business. It will meet twice a year. The inaugural meeting of the GFIA was held in Washington, DC last week.
The federation has already established 11 working groups chaired by various members of associations that will liaise through conference calls and meetings to develop positions. “So they will be very active working at the working group level,” says Swedlove.
Swedlove says systemic risk issues are the priority for the GFIA initially.
“But there are a lot of other issues that we will be addressing like anti money laundering, rules. Also there is a lot of work being done in the market conduct area and we will also be promoting opening up markets through freer trade,” says Swedlove.
He continues: “A lot of our work is really getting people to understand the differences that exist between banking and insurance and the fact that it doesn’t have the same kind of systemic risk implications that banking does, in many cases it is a long-term business that doesn’t have the same short-term implications, and that the insurance industry overall did extremely well through the financial crisis.”
With such a diverse membership there are bound to be different viewpoints competing to be heard. But Swedlove does not think it will be hard to find consensus on a number of issues.
“This will be a consensus organisation so from time to time obviously we will have different views on issues and where there are significant differences of views we will make the associations make their own representations,” he says. “Where there are high levels of consensus on views then we will be able to take a position within the global federation and promote that position.
“But there is a lot going on where there is a high degree of consensus, whether it be the common framework for globally active companies or globally systemically important insurance companies, for example. We have already developed a high level of consensus on those issues.”
The GFIA represents both life insurers and non-life insurers. Swedlove acknowledges there are differences between the two sides but believes there are many issues where there will be consensus.
“On a number of issues it really doesn’t matter whether one is the life insurance company or a general insurance company,” he says. “The ones that I have been talking about both have implications for both sides of that business plus indeed the reinsurance business. But there are areas that will be of specific interest of one group or the other. For example, the whole issue of catastrophic events would be more of a general insurance issue while the anti-money laundering would be more of a life insurance issue. So some of our working groups can be equally represented by general insurance, life insurance and reinsurance, while others will be more specific to certain branches of insurance.”
The members of the newly-formed association are:
All Russian Insurance Association (ARIA)
American Council of Life Insurers (ACLI)
American Insurance Association (AIA)
America’s Health Insurance Plans (AHIP)
Association for Savings and Investment of South Africa (ASISA)
Association of Bermuda Insurers and Reinsurers (ABIR)
Association of British Insurers (ABI)
Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE)
Association of Spanish Insurers (UNESPA)
Brazilian Insurance Confederation (CNseg)
Canadian Life and Health Insurance Association (CLHIA)
Chilean Insurance Association (AACH)
Dublin International Insurance & Management Association (DIMA)
Dutch Association of Insurers (VVN)
Federación Interamericana de Empresas de Seguros (FIDES)
French Federation of Insurance Companies (FFSA)
General Insurance Association of Japan (GIAJ)
German Insurance Association (GDV)
Insurance Bureau of Canada (IBC)
Insurance Council of Australia (ICA)
International Underwriting Association of London (IUA)
Italian Association of Insurance Companies (ANIA)
Korea Life Insurance Association (KLIA)
Life Insurance Association of Japan (LIAJ)
Polish Insurance Association (PIU)
Portuguese Association of Insurers (APS)
Property Casualty Insurers Association of America (PCI)
Reinsurance Association of America (RAA)
South African Insurance Association (SAIA)
Swiss Insurance Association (ASA/SVV)