Regulatory Challenges in Cross-Border Insurance Transactions: An Analysis of Emerging Legal Frameworks

Abstract

The rate of growth of cross-border insurance transactions has been very high in the last few years as a result of globalization of the financial market, the emergence of multinational insurance and the digital platform. Despite this growth, the global insurance sector continues to face high regulatory disintegration, which creates inconsistencies in licensing, solvency regulation, reporting and data protection. These disparities tend to raise the compliance costs and make different markets inaccessible to different insurers working in different jurisdictions. The objective of the current research was to determine the key regulatory impediments to intercountry insurance transactions, and also to test how the new global regulations, like the Insurance Capital Standard (ICS), Solvency II, and International Financial Reporting Standards (IFRS) 17, could be effective in facilitating regulatory convergence. It used a qualitative, doctrinal, and comparative research design to look at statutory frameworks, supervisory guidelines, international standards and judicial interpretations in major jurisdictions, such as the European Union, the United States, the United Kingdom, Singapore and some of the emerging markets. It was found that there were still existing gaps in the adoption and enforcement of new frameworks, with wide dispersion in standards of solvency, financial reporting practices, data protection and dispute resolution procedures. Compared jurisdictions like the EU and Singapore also showed a relatively higher alignment, but the United States and most of the developing markets had lower harmonization rates.