Editors comment – Regulatory overload: is there an upside?

EIOPA and the World Bank have signed an operational Memorandum of Understanding to collaborate on promoting a risk-based regulatory and supervisory framework for insurance. The IAIS is getting jurisdictions around the world to sign its Multilateral Memorandum of Understanding. In the US the Federal Insurance Office is finding its feet, as are the successor agencies to the UK’s Financial Services Authority, the Prudential Regulation Authority and the Financial Conduct Authority.

Some of this is only relevant to insurers. Some only applies to certain regions. And it has largely been driven by factors that have nothing to do with the insurance sector, and certainly not risk and insurance managers, namely the financial crisis and the desire to avoid systemic risk in the financial sector. Of course, we are largely talking banks here, but insurers are getting lumped in with banks and others, and there is not much they can do about it, especially when the authorities note the collapse of certain insurers in the last decade or so.

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All this may not appear to be particularly relevant for International Programme News. But what is important for risk managers of multinational organisations is that authorities are getting tough on supervision, and compliance is not an option. And on the plus side, supervisors are talking to each other which can only be a good thing when it comes to putting together a global programme.

So all this dialogue might eventually lead to an easier life for risk managers. In the short term, however, it may mean a lot of extra work, and thought, and time, and effort. But then, when it comes to global programmes, risk managers are used to putting the hours in.