Dialectics of the Current Regulatory and Supervisory Developments in Insurance

Public regulation and supervision of insurance activities are the two most powerful instruments every jurisdiction has for market-shaping. Regulation, which is about standards-setting, is naturally closely tied to lawmaking and thus exposed to political and market pressures. Supervision, in contrast to regulation, is only slightly involved in standards-setting activities, which, if they exist, generally take place at the grassroots level. Its main focus is the enforcement of regulatory requirements in practice, that is their implantation in the insurance institutions supervised or the market at large. Since the end of the last century, regulation and supervision alike have been increasingly faced with the globalisation of insurance operations and of insurance entities. This creates mounting pressure for an internationally coordinated regulatory framework and transborder supervisory cooperation and consolidation. The global regulatory agenda continues to keep its momentum, though some signs of regulatory fatigue and requests for reconsideration of the overall regulatory approach are visible.