FERMA and member association Airmic with the London and International Insurance Brokers’ Association will in November approach interested parties in the insurance market with a request for proposals to set up a global insurance regulation and tax database.
Forum Panel ‘Global Compliant Programmes’: Yves de Mestier, Martin Strnad, Julia Graham, Praveen Sharma, Helen Hayden
The issue of global compliance was one of the most debated topics at the FERMA Forum in Stockholm, both in a workshop devoted to the subject and in the questions to insurance industry leaders in the final panel. Immediate past President Peter den Dekker, who remains on the board of FERMA, and Vice President Julia Graham, who chaired the Forum workshop, are driving the contribution from FERMA.
There is no schedule established for the project but the partners want to gauge the response to the call for proposals early next year and perhaps start with some implementation in the second half of the year. Graham said: “We are quite positive that the work we are doing with Airmic will produce useful results for other FERMA members.”
She explains that concentrating on London makes the project more practical in a short timeframe than aiming for global participation, because only a fairly small group is involved in the discussion. She believes that because so many London market insurers are part of big international companies and London is involved in so many global programmes, the data that they can provide will cover many jurisdictions, enough to be valuable for corporate insurance buyers.
Forum Panel ‘Risks of the Virtual World’: Luc Vignancour, Laurent Delhalle, Michel Dennery, Christian Agrhoum
FERMA and Airmic are also hopeful that as they progress, the very large US Risk and Insurance Management Society (RIMS) will become part of the project. Global compliance is a major concern for its members as it is for European risk managers.
Airmic member Helen Hayden, group insurance risk manager of Prudential, has specialised in the issue, and she was one of the panel members at the FERMA workshop. She told the session that regulatory authorities were closely monitoring large international businesses following the credit crunch and economic downturn and were prepared to take act against them, including levying financial penalties for non-compliance.
Praveen Sharma, Consulting Practice Leader for Marsh on global insurance regulation and tax, was also a panel member. He was blunt about what he believes are the current barriers to a global database. “In my personal view, at the moment it’s ego standing in the way. The only people making money from a database are software companies, lawyers and accountants. We spend the money and try to use it as a differentiator. It’s wrong when we make compliance as a differentiator, when the fundamental difference should be the way of doing insurance business.”
Said Hayden, “At a time when the insurance policy is called upon to perform, and to respond to and pay a claim, it must be able to do so without fear that it or any subsequent payment will attract unwarranted scrutiny from regulators or tax authorities.”