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Regulatory uncertainty tops the list of concerns facing the London market, according to the chairman of the International Underwriting Association.

IUA chairman Stephen Riley, speaking at the association’s annual meeting today, said that the FSA had taken steps to assure the market that the new system will operate efficiently.

But he warned: “We remain concerned that the FSA can live up to these promises given their apparently overstretched resources and the need to be prepared for Solvency II.

“The FSA has also warned firms to expect a more intrusive and active regulator when the “twin peaks” approach is implemented. We expect this to mean that the future regulator will have a greater focus on conduct in the wholesale markets than now.”

He also highlighted an increased focus by global regulators and governmental bodies, such as the G20, on the perceived systemic risks of the insurance industry.

“Terms such as ‘systemically important financial institutions (SIFIs)’ and ‘internationally active insurance groups (IAGs)’ are becoming recognisable jargon when discussing global regulatory developments. Many companies who might fit into either of these categories are nervous that by being classed as such they will attract additional regulatory requirements.”

“The International Association of Insurance Supervisors (IAIS) sees systemic risk as one of its priorities as does the Bank of England, US Treasury and EU regulatory authorities.

“The industry’s mantra that insurers operate differently to banks and do not present systemic issues has resonated with regulators, but has not entirely persuaded them of the need to draw a line under the discussions. The global and interdependent nature of many of our members leaves them exposed to further regulation at a group level.”

The IUA annual meeting also saw the formal election to the association’s board of Munich Re (UK) managing director Frank Buchsteiner, of Chartis managing director, James Shea, Swiss Re Europe (UK) managing director Russell Higginbotham and Chubb London branch manager Jeremy Miles.

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