News and Media
18 September,2008
Regulation Crisis....... Elsewhere!
The pan-national systemic risk ignited by the threatened bankruptcy of industry giant AIG has yet to be properly evaluated in the US and elsewhere.
A Federal bailout package may ward-off the short term consequences in the States but while confidence continues to wane and investors evaporate in equal measure, daunting questions must now be asked.
How the apparent lack of fiscal governance of the “ twin towers” of Lehman Bros and AIG were permitted to reach such gargantuan proportions with the attendant ability to de-stabilise almost anything in their path across the regulated world must be a top priority by Industry backed investigators and will no doubt form the basis for several corporate indictments for malpractice and misfeasance .
The question now being asked is whether regulators in the US and across the major markets have effectively facilitated de-regulation in recent years thus exacerbating the Black Hole the markets continue to spiral into, by effectively abrogating their statutory responsibilities.
With vast swaths of litigation intimated, criminal prosecutions already initiated in the US and a huge proliferation in claims exposure now likely, the Insurance Industry globally stands on the edge of an abyss.
The off-shore haven of Gibraltar has for many years attracted representation from some of the world’s major insurance and re-insurance houses with niche legislation and a tax regime favouring independent & captive insurance companies and PCC’s.
Reassuringly the “mind & management” culture followed by the insurance companies domiciled in Gibraltar together with the tight reins held by the FSC will undoubtedly prove invaluable as a shield against the storms which continue to range and beset the International Insurance world, but provide yet another badge of honour for Gibraltar.
The combination of off-shore legislation, specialist personnel and recession-proof cost benefits complemented by stringently adhered to regulation practices, continue to bolster confidence in the haven’s insurance sector and more particularly it’s regulators.