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26 J. Ins. Regul. 2 (2007-2008)

handle is hein.journals/jloins26 and id is 1 raw text is: Editors' Perspective The recent turmoil in financial markets demonstrates again their global nature. What began in the U.S. subprime mortgage market has quickly spread to markets and financial institutions in other countries. To date, the implications for the insurance industry appear to be limited, with the possible exception of the financial guaranty firms. While insurers have reported some exposure and losses, they appear to be manageable. These events have served as a reminder that U.S. markets are not isolated, and that U.S. regulators and industry must be attentive to events unfolding in other parts of the world, including regulatory developments. In this issue, we offer five articles dealing with regulatory and market developments around the globe. Before presenting the international articles, however, we have taken the liberty of including a special tribute to Nebraska Insurance Director Tim Wagner, who was chair of the JIR's Board for nearly 10 years until his death in October. We have reprinted the comments delivered by one of the co-editors at the Celebration of Tim Wagner's Life held in Omaha on October 15. Since 2000, the European Commission has been working on a new system of solvency regulation for European insurers, known as Solvency II. The proposed Solvency II Framework Directive was published in July 2007, and Solvency II will now be considered for adoption by the European Parliament and Council. Although many details must still be addressed, Solvency II is already influencing capital requirements and solvency oversight in other countries. In November 2007, the Financial Services Roundtable, a trade association of the 100 largest U.S. financial services companies, issued The Blueprint for U.S. Financial Competitiveness, a report making 68 recommendations to improve the legal and financial regulatory system in the U.S. One recommendation calls for the Secretary of the Treasury to begin a dialogue with U.S. insurers and the NAIC on the Solvency II process to ensure that the requirements for U.S. and E.U. firms are comparable. Clearly, Solvency II merits the close attention of U.S. regulators and industry. In Solvency II: A Revolution for Regulating European Insurance and Reinsurance Companies, Rym Ayadi provides an excellent overview of Solvency II, the issues that remain to be addressed, and the European process for addressing those issues. Accounting is critically important to the process of financial regulation. Although public accounting and regulatory accounting may differ, there is a natural tendency to minimize those differences where possible. In the second article, GAAP: An Accounting Revolution, Alan Close analyzes the sweeping changes under development in accounting for insurance companies. In the 2002 Norwalk Agreement, the Financial Accounting Standards Board and International Accounting Standards Board laid the foundation for a number of initiatives © 2007 National Association of Insurance Commissioners