LONDON, July 18 (Reuters) - Traditional reinsurance poses no threat to global financial stability, but the industry should still be closely watched because of its peripheral involvement in potentially risky activities, regulators said on Wednesday.
"Similar to primary insurance, traditional reinsurance is unlikely to cause, or amplify, systemic risk," said Peter Braumueller, head of the International Association of Insurance Supervisors (IAIS).
The IAIS' conclusions could help reinsurers win exemption from capital charges being discussed by regulators striving to prevent a rerun of the 2008 crisis, when a series of banking failures paralysed financial markets and slashed economic growth.
The near-collapse in 2008 of reinsurer Swiss Re and insurer AIG has convinced some that the industry should be subject to tighter controls alongside the banking sector, seen as the primary culprit in that year's financial meltdown.
Traditional reinsurers are unlikely to destabilise the wider
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