Ifrima plans academic study to back global programmes campaign

A serious academic study on the negative impact of inconsistent and protectionist insurance regulation around the world is likely needed if the international risk and insurance management community is to convince regulators of the need for reform from the top down, according to the chair of the International Federation of Risk & Insurance Management Associations (Ifrima). Mary Roth, who is also CEO of US-based international risk management association RIMS, told Commercial Risk Europethat this proposal is being considered by the body she chairs. Ms Roth supports the idea of an academic study to underpin the ongoing effort to persuade the regulators of the need for a more consistent treatment of international programmes. In particular, the risk management community is trying to convince the International Association of Insurance Supervisors (IAIS) about the use of difference in conditions (DIC) and difference in limits (DIL) clauses. DIC and DIL clauses are used by multinationals to plug gaps in local coverage within their international programmes and ensure that their global coverage is adequate and consistent. National insurance supervisors in many emerging nations, under pressure to ensure that as much premium as possible is retained in local markets, are not keen on this practice. This can lead to serious problems when claims occur and companies attempt to use their centrally organised master programmes to pay losses to local operations. The leading risk management representative bodies including RIMS, Ferma and the European Captive Insurance and Reinsurance Managers Association (ECIROA) have all tried to convince the IAIS of the need for a more consistent approach by national supervisors to international programmes. The basic argument is that protectionist measures and an inconsistent approach acts as a barrier to investment in emerging economies and prevents efficient rebuilding of companies and local economies when disaster hits. But so far, the IAIS has shown little interest in the various efforts. A coordinated effort by Ifrima, as the representative body of all leading international associations, makes a lot of sense and will, hopefully, finally lead to some progress. Supporting the lobbying effort with a serious academic study that shows the negative impact of protectionism and inconsistent treatment of international programmes also sounds like a very good idea. “This is a truly international effort with RIMS, European federation Ferma, Asia-Pacific federation Parima, Latin American federation Alarys, the German association GVNW, Belgian association Belrim and others all committed to agree the steps needed to make a real impact,” said Ms Roth. “I think we need an economic study to show the impact of the challenges imposed on global programmes, on international trade and investment. Therefore, the next step will likely be that we commission a university to carry out a study to really quantify that impact,” she added. Meanwhile, RIMS continues to use its relationship with the National Association of Insurance Commisioners (NAIC), the US body that represents state insurance supervisors, to state the case on global programmes at national level. The NAIC holds its annual International Insurance Forum,focused on insurance regulation in global markets, on 13-14 May in Washington DC – and Ms Roth will be in attendance. She said she will use the opportunity to further make the case for risk managers with multinational companies. Another opportunity for Ifrima to make its case comes in June, as the IAIS holds its 12th annual Global Seminar Programme in Buenos Aires, Argentina. During this meeting, the IAIS will give details about its new strategic plan for 2020-2024. This plan will be broadly focused on sustainable economic development and the protection gap. “Policyholder protection and contributing to financial stability are fundamental to ensuring the sustainable involvement of the insurance sector in closing the protection gap, including resilience to natural disasters and security in old age; supporting inclusive insurance markets; promoting sustainable long-term investments; and the developing cyber insurance market in support of a more resilient financial system,” explains the IAIS in its latest newsletter. “The IAIS shift to this focus emerges from the recognition that insurance supervisors are increasingly drawn into policy discussions beyond their core mandates of policyholder protection and financial stability. These policy discussions are becoming focused on how the insurance sector, and the regulatory framework in which insurance business is conducted, supports objectives related to inclusive and sustainable economic growth,” it continues. Given this focus, it appears perfect timing for the corporate risk management community to explain how supervisory barriers that prevent or limit multinationals’ access to international insurance and reinsurance capacity, is in direct conflict with the IAIS’s new strategic plan. *You are invited to attend Commercial Risk’s Global Programmes - Consistency and Certainty conference in London on 12 June, where global programme experts will provide an audience of risk and insurance managers and industry members with the latest essential intelligence on how they need to structure, design and manage their programmes to achieve their goals. For more information or to book your space click here.

Ifrima plans academic study to back global programmes campaign

Want to read this article?

Read Next

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Want to read this article?

Read Next

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Related Articles