Irish insurers differ from banks

Ireland’s new head of financial regulation, Matthew Elderfield, told the European Insurance Forum in Dublin that he may take a less severe approach with insurers than with banks, the Irish Times reports.

“I am cautious of over-learning the lessons of the banking crisis for the insurance industry,” he said.

“Insurance companies are inherently different from banks and, while there have been some notable exceptions, many insurance companies have weathered the financial crisis in relatively better position than their banking counterparts.”

Sceptical view

He said there was a need to take a “sceptical” view of the internal risk management practices of insurance firms.

Insurers’ “internal models” – used to calculate their own solvency requirements – needed to be scrutinised rigorously, he said. “I suspect that many insurers still have some way to go to refine their models to make the grade for regulatory approval.”

The regulator wills et up a special team to deal with Solvency II.