P/c insurers propose three-part test for systemic risk

Size alone is not a sufficient indicator of systemic risk, according to the PCI. The threat to the system, it argues, does not reside in companies that are too big to fail, but rather in those whose activities are “too risky, cyclical and interconnected”

The Property Casualty Insurers Association of America (PCI) has urged US lawmakers to address the probability, cyclicality and economic impact of a firm’s failure rather than whether a company is considered “too big to fail.”