Regulation of Insurance and Corporate Security In

Authors: Nicholas Dorn Michael Levi

Publish Date: 2006/11/21

Volume: 12, Issue: 3-4, Pages: 257-277

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Abstract

In an attempt to elucidate questions of seriousness in relation to crime and terrorism this paper draws on academic and wider literature and on interviews with those in the businesses of insurance or private security Levels of seriousness may range from petty and irritating through truly serious to potentially catastrophic Critical issues are highlighted within three strategic perspectives legislation/regulation in support of public security market regulation in particular European single market fair competition and customer safeguards and the role of the private sector in reforming and restructuring the public sector Serious crime risks identified some of which may be reshaped by regulation concern riskpooling for terrorist risks and potential for moral hazard and laxity insurance broker frauds and prospects for reduction through transparency and whistleblowing or displacement through regulatory arbitrage insurance customer claim frauds which may be orchestrated and targeting of them by private security services limited or overzealous and redistribution of risks and benefits by an industry lobbying for regulation to restructure data protection rules and civil liability Concepts and sources explored might be points of reference for future work alongside important questions about social distribution of costs and benefits ‘winners’ and ‘losers’ resulting from legislative/regulatory reforms More generally the authors underline that crime impact assessment should be made conformant with wider EU Impact Assessments The method should utilise a consistent analytical approach at each stage of assessment screening initial assessment extended assessment Those involved in making assessments should include officials with specialist knowledge market participants compliance/enforcement persons and an independent elementOn behalf of Cardiff University the authors gratefully acknowledge a grant by the European Union’s Sixth Framework Programme Priority SSP/8 proposal number 1501634 project ‘MARC’ The work reported here is based on a reading of the literatures on insurance and on private security European Union policy and news source searches telephone enquiries and email exchanges personal interviews with practitioners in private security and in insurance in the summer of 2004 a rereading of early papers by research consortium colleagues this volume and reflection on the objectives of the project More loosely the work draws upon interviews with senior security managers finance directors and auditors in 2003 Levi Morgan Burrows 2003/4 pp 7–28 consultancy and research18 over some years alongside general research and analysis of others19 The authors benefited from papers from Tom Vander Beken and Annelies and Balcaen at Ghent University Vander Beken Balcaen 2004 and from Seppo Leppa in HEUNI reviewing relevant developments in private security and insurance regulation and crime risks in the Belgian and Finnish contexts respectively Valuable assistance was given by senior staff of Assuralia of Belgium Lloyds of London and a number of people working in private security Leppa 2004 Needless to say the information and views presented here remain the responsibility of the authors

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