International insurance regulators intensify coordination in response to financial turmoil

Following the U.S. Federal Reserve's US$85-billion bailout of the American International Group Inc., the International Association of Insurance Supervisors (IAIS) says it is "taking steps to intensify supervisory coordination efforts in response to the current financial market turmoil."
Key insurance supervisors from around the globe were recently updated on matters relating to American International Group (AIG) and agreed they would hold regular conference calls in the coming weeks to monitor solutions to supervisory issues, the IAIS announced in a press release.

Michel Flamée, IAIS chairman of the executive committee, noted: "Since the financial community is so inter-linked, financial supervisors must continue to cooperate closely in order to protect policyholders around the world."
In describing recent events, Eric Dinallo, New York's insurance superintendent, noted AIG's insurance operations represent only one small part of the broad international reach of AIG.
"While AIG has many large insurance operations within its corporate structure, it is a financial services conglomerate," Dinallo observed in a statement. "The current crisis is a result of AIG's non-insurance related business.
"The Federal Reserve's rescue offer would likely not have been made if it were not for the core value of AIG's insurance subsidiaries, which exists due to sound solvency regulation and oversight provided by IAIS members worldwide."
Meanwhile, Canada's solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), reiterated the capital position of AIG's Canadian operations.
"AIG's business in Canada includes seven companies, all of which continue to be authorized to accept and do business in Canada," OSFI noted in a statement. "They continue to meet or exceed their regulatory capital or invested asset requirements."
In response to a question about whether the crisis would result in any potential changes to the capital requirements for Canadian insurers, OSFI's statement further noted: "Regarding capital requirements, there are no changes envisioned at this time. We believe the current regulatory requirements are appropriate."