Insurers seek a united front to put the case for Op Risk insurance

Leading insurance companies are looking at ways of forming an industry body to put the case for using insurance to help mitigate operational risks faced by banks, industry executives say.

The body would put the insurance industry's case both to banks and to the global banking regulators who have proposed a new capital adequacy accord - Basel II - for large international banks. Basel II will require banks, from 2004, to reserve capital for the first time against losses from operational hazards such as fraud, computer-system failures and trade settlement foul-ups.

The Basel Committee of banking supervisors from the Group of 10 leading economies, the body that in effect regulates