Regulators have determined that, because of their importance to the global economy, the nine biggest insurers must face tighter regulation.
According to the Financial Times, the ‘global systemically important financial institutions’ (GSifis), include Aviva, Allianz, AIG, Axa and China’s Ping An Insurance.
GSifis will be more tightly supervised than other insurance firms and have to possess ‘living wills’, making them easier to shut in a crisis. They will also be subject to the first worldwide capital requirements to protect them from unexpected losses.
Mark Carney, Bank of England governor and FSB chairman commented: ‘Today marks an important step towards more broadly addressing the risks associated with systemically important financial institutions.
‘These policy measures will be followed over time by a substantially strengthened comprehensive regulatory and supervisory framework for all internationally active insurers.’
Read the full story on the Financial Times website.