IT WOULD be unfair to include insurance companies in the European Union’s proposed banking levy, industry supervisors said yesterday.
Yoshihiro Kawai, secretary general of the International Association of Insurance Supervisors, said the insurance industry should not be caught up in efforts to clamp down on banks in the wake of the financial crisis. EU leaders have said they support the idea of a bank levy despite a lack of support internationally, although details are yet to be worked out.
Last week, EU officials said a levy on banks could be applied to other financial services firms, stirring fears that insurers could also be targeted.
“In my view, it’s really unfair that insurance is included because the business model is so different, and it’s not the core insurance business which creates this kind of crisis,” Kawai said.
Insurers “play a stabilising role for the financial system rather than amplifying or originating system concerns. I feel very uncomfortable that the insurance business is being treated the same way as banking in terms of this levy.”
For the insurance sector, group-wide supervision is particularly important to avoid regulatory gaps, he noted.
City A.M. Reporter