by Superintendent Julie Dickson
June, 2011 – Remarks to International Insurance Society 47th Annual Seminar, Toronto, Ontario, June 21, 2011 — I understand that many of you have traveled considerable distance to be here. While travel can be demanding, the advantage is that it provides an opportunity to interact with people who often have different perspectives on the issues, which is hugely beneficial. By bringing your experiences and expertise to Canada this week you will have this opportunity, as will we (except we won’t have jet lag!). Today I want to give you our perspective on certain global insurance issues that are confronting us all. We, at OSFI believe that these issues require action and I look forward to hearing other perspectives on how to move forward.
This conference comes at a time when there is much to discuss. The global financial system remains fragile and the world is still a very uncertain place. In Europe, there is still much uncertainty in how to deal with sovereign debt issues and fiscal problems in the U.S. are impossible to ignore. In addition, the increased frequency of natural disasters has raised concerns among industry participants and regulators. What is particularly troubling is that these disasters increase insurance risk in many forms (mortality, morbidity, property, liability, and business interruption) and this increase will shift the costs and practices in the insurance industry in unknown directions.
The global financial crisis has taught us many lessons. These lessons are relevant for Global insurers even if the epicenter of the crisis was the banking industry. These lessons include:
- The need for insurance companies to continually improve risk management and governance, and not assume that the absence of problems means that controls and oversight must be strong;
- The need to move to a robust, harmonized insurance capital regime globally;
- The need to move to a converged set of global accounting standards; and
- The need for much more robust and aligned supervisory practices globally.
Without the above, concerns about global competitiveness, and uncertainties about companies’ strength relative to others, will be present, which should not be acceptable to policyholders, investors, supervisors, or the companies themselves.
For the complete remarks, go here.
OSFI is an independent agency of the Government of Canada. It reports to the Minister of Finance. For more information visit www.osfi-bsif.gc.ca.