LONDON (Reuters) - Britain's insurers want regulators to appoint more senior figures with industry expertise to correct what they see as an overwhelming preoccupation with the banking sector.
The pressure comes as Britain prepares to scrap its financial services watchdog early next year and replace it with two new bodies: the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), part of the Bank of England.
"It is absolutely vital the PRA and the Bank of England have people at the very top who understand the insurance industry they will be regulating," the Association of British Insurers (ABI) said on Thursday.
Insurers accuse regulators of focusing almost exclusively on the banking sector since it sparked the global financial crisis in 2008, increasing the risk that rules designed for banks could be imposed across the entire financial services industry.
Some insurers say that the British government's neglect of the insurance sector is also reflected in its failure to have a decisive influence in talks over Europe's new Solvency II capital rules, which are expected to usher in more onerous requirements for much of the industry.
"The naughty child is getting all the attention," said Bronek Masojada, chief executive of London-listed insurer and reinsurer Hiscox. "The bankers got it so wrong that that is all anyone can think of at the moment."
PROTEST LETTER
Masojada said that the Bank of England should appoint a deputy governor responsible for non-bank finance firms so that insurers and fund managers have a voice in the new regulatory landscape.
"The view of the insurance sector is that if the organisation is run by a small number of people who are just central bankers and economists, then yet again it will be banking uber alles," he said.
Insurers have been lobbying the government and regulators to improve their understanding of the industry, and a group of insurance executives have outlined their concerns in a letter to Finance Minister George Osborne, industry sources said.
The Financial Services Authority denied that insurers were being overlooked.
"The FSA recognises the vital importance of the insurance industry and will continue to proactively engage with firms to ensure they understand and are a major part of the regulatory changes taking place," a spokesman said.
The PRA, tasked with making sure financial services firms do not run the risk of going insolvent, is due to publish details of how it will regulate insurers later this month.
Insurers worldwide are battling for an exemption from new rules being drawn up by regulators from the G20 group of countries aimed at preventing big financial institutions from destabilising the economy if they collapse.
The G20's regulatory task force has identified 48 big insurers for potential inclusion alongside leading banks on a list of "systemic" financial institutions that could be forced to hold extra capital.
(Editing by David Goodman)
Source: http://news.yahoo.com/uk-insurers-push-seat-regulators-top-table-134128907--sector.html
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