INCONSISTENT regulatory practices in different jurisdictions are costing global insurance firms an extra $25bn (£16bn), research yesterday found.
Europe, the US and China are all implementing new regulation to make insurers hold more regulatory capital, such as Solvency II. But greater convergence between regimes could cut billions from insurers’ compliance costs, according to a report from KPMG.
“There are bespoke capital, investment and governance regulations which require different levels of financial reporting depending on each jurisdiction,” said KPMG director Rob Curtis. “A significant amount of money is being spent on possible duplication and there is no consistent measure of insurers’ financial solvency.” Curtis supports ComFrame, a “single rulebook” framework from the International Association of Insurance Supervisors, to harmonise regulation, which he developed in 2008.