Europe’s insurers criticised the approach taken by international regulators which named firms considered systemically important as they try to reduce financial risks from the sector.

Two global financial watchdogs released a list of nine insurers late on Thursday they said could destabilise the financial system should they fail. The move was a prelude to requiring them to hold more capital.

The insurance sector argues it did not cause the 2008 financial crisis and should therefore not be tarred with the same regulatory brush as banks and have to shoulder increased costs of holding more capital as a safety buffer.

Insurance Europe, the trade body for 5,500 firms, said big insurers tend to be more diversified across regions and business areas, making them less susceptible to crises, while imposing higher capital requirements was not an appropriate way to deal with systemic risk in insurance.

The risk of a financial crisis is more likely to stem from banks, due to short-term borrowing and lending or liquidity problems and the links between lenders, the trade body said.

“Creating a list of global systemically important insurers gives the false impression that insurers are systemically important in the way that banks are,” said Insurance Europe’s director general Michaela Koller.

The organisation said it would be better to put more effort into improving insurers’ governance and risk management, as well as supervisors’ techniques.

Regulators were motivated by the U.S. government’s $182 billion bailout of AIG in the financial crisis, after the insurer’s portfolio of credit default swaps soured, said the Geneva Association, an insurance industry think tank.

“No amount of capital would have solved the AIG Financial Products issue,” the association’s secretary general John H. Fitzpatrick said.

MUTED REACTION

The insurers on the list were more reserved in their reactions. Among them were Europe’s biggest insurer, Allianz , and Britain’s Prudential as well as Italy’s Generali, France’s Axa, and China’s Ping An .

“We are well positioned to manage the new requirements this designation will lead to,” said Allianz Chief Financial Officer Dieter Wemmer, referring to the group’s diversified business, solid capital base and profitability.

Generali said it had been put on the list due to the size of its non-insurance activities which it was reducing.

“Generali has a stated strategy of narrowing its business focus onto core insurance activities, and disposing of non-core assets,” it said.

China’s Insurance Regulatory Commission said Ping An’s inclusion was a recognition of its importance in the international insurance market, adding it would strengthen its oversight of the insurer whose solvency ratio was well above the regulatory requirement.

Even as the insurance industry fights against the rules, national regulators expressed their support of the watchdogs which compiled the list, the Financial Stability Board (FSB) and International Association of Insurance Supervisors (IAIS).

It was clear that the new rules would ultimately affect a wider circle, said Jim Bichard, an insurance industry advisor at consultants PWC.

“Whilst the list contains nine insurers who are deemed globally important, we expect that other internationally active insurers will follow these developments closely as regional and domestic policy makers are already developing standards for their domestic markets,” Bichard said.

Reinsurers such as Munich Re, Swiss Re and Hannover Re as well as Berkshire Hathaway , were not in the initial line-up.

“I am confident that the remaining open questions on the classification of reinsurers will be resolved in the next 12 months,” said Elke Koenig, head of Germany’s watchdog Bafin.