Lawsky: Regulation focused more on punishing past than protecting future

Greenberg said the current global regulatory environment is "difficult" and "politically charged." He said, "It has never been more complex, demanding and in my judgment confused. It is one of the greatest challenges our industry faces today. In fact, it would be far more difficult to build ACE today in this environment."

He said while many regulators do a good job, some at the national and multilateral level "are confused about mission and the issues."

He explained, "At the leadership levels, they are directed by those with banking experience and very little knowledge and appreciation for our industry and the important differences."

Greenberg called the effort to designate large global insurance companies as systemically important "wrongheaded and simply not relevant" as it relates to the companies' traditional insurance business.

"The failure of an insurance company engaged in traditional life or non-life insurance, while potentially a major event, does not pose a systemic threat to the global financial system," he said.

He added, "The notion of regular insurers designated as systemically important to hold more capital than other insurers, again for traditional insurance business, makes little sense. It would needlessly disadvantage them, and for what benefit?" 

Lawsky agreed there is too much focus on banks in insurance regulation today, noting that the focus on fixing everything that went wrong with banks during the financial crisis has spilled over to insurance companies. He said that "it frankly is insane as we consider how to apply bank standards to insurers," and he called for a "nuanced, thoughtful debate" about insurance regulation that he indicated seems to be missing today.

See also:

• Minn. Fed: Captives help costs but losses could be larger
• Lawsky bars hedge fund giant from insurance business
• Let AIGFP remain in the rearview mirror