A leading law firm has warned the UK insurance industry of the encroaching powers of super regulator, the International Association of Insurance Supervisors (IAIS).

Patrick Devine, partner at Reynolds Porter Chamberlain, said the insurance industry risks being regulated by an international body over which it has little influence.

Key IAIS issues include reinsurance disclosure, accounting and a definition of a contract of insurance.

Devine said: "The IAIS is now the main driver of regulatory initiatives, not the FSA or the EU.

"The UK needs to act now and ensure its views are taken into account by the IAIS, or risk finding itself drawn into a global regulatory framework which threatens its competitiveness."

The Swiss-based IAIS was set up in 1994 with the aim of setting a standard global regulatory framework to ensure all insurers operate on a fair and equal basis.

Its members are insurance regulators in some 120 countries, representing 97% of the world's insurance premiums.

The FSA is listed as an IAIS member, while a number of UK firms and bodies, including the ABI and Royal & SunAlliance, are listed as observers.

Devine added: "The UK insurance market currently has underdeveloped lobbying contacts with the IAIS.

"There is a real danger that the regulation of the global industry will be shaped by other countries whose interests may differ to the UK."

An FSA spokesman said: "The IAIS may be less well known in the UK, but as a founder member we take it very seriously. It can be viewed as equivalent to the Basel committee in banking, with its focus on standards.

"We have a strong level of involvement [with the IAIS] and this will continue."