FRANKFURT--The head of Europe's insurance regulator on Wednesday
called for stricter oversight of companies that behave more like
investment banks, delving deep into activities that pose risks for
the entire financial system.
"We need to limit any potential incentive for typical banking
risks to be transferred to the insurance sector," Gabriel
Bernardino, chairman of the European Insurance and Occupational
Pensions Authority, or Eiopa, told a conference.
Regulators are cracking down on the kind of risk-taking
activities that led to the 2008 financial crisis, recently drawing
up a list of banks deemed big enough to destabilize global
markets.
Insurers also have come under increased scrutiny, with the
crisis revealing that some of their non-traditional activities can
also pose system-wide risk, including credit default swaps,
financial guarantees, or leveraging assets to enhance investment
returns through securities lending.
Bernardino said such activities "are more vulnerable to
financial market developments and more likely to amplify or
contribute to systemic risk."
"We should be especially attentive to any kind of maturity
transformation and leveraging occurring in the insurance sector,"
he said.
Write to Ulrike Dauer at ulrike.dauer@wsj.com