Insurance regulation is at a crossroads. Faced with an increasingly globalized and dynamic industry, the painful lessons of the financial crisis, dramatic and disruptive advancements in the use of technology, creeping protectionism and nationalism in many markets, competing regulatory agendas and good faith differences in regulatory approaches, insurance regulators are at an important juncture and have the chance to chart their course for the near to mid-term. The choices they make could lead to greater regulatory effectiveness and efficiencies, or result in further Balkanization of regulation and an ever heavier, costlier and at times conflicting set of regulatory rules for insurers. The potential impacts on the insurance industry and those consumers who rely on it are significant.
This paper reflects on the evolution of insurance regulation over the past decade (2007-2017) and offers thoughts on some of the critical choices regulators and the industry need to make going forward. In doing so, it focuses on developments primarily from the onset of the financial crisis and the regulatory response to the crisis. It looks at the positive developments that have taken place and some of the important lessons learned. It also examines what some consider to be misdirected activities and inevitable overreactions to the crisis. This paper considers certain critical new developments that may present regulators with the opportunity to reexamine and perhaps redirect their limited, finite regulatory resources. It is not intended to be a comprehensive report of all key developments during this period, but it aims to highlight some key initiatives and the critical regulatory policies that we believe deserve attention.
This paper reflects our personal views.* It does not reflect the particular views of any of our clients, although our views have certainly been developed as a result of many decades of advising insurers and other financial services industry players on regulatory matters. We hope this analysis will contribute to the ongoing and much needed discussion over the evolution of insurance regulatory policy globally. Getting that policy right matters.