An insurance executives’ think tank in advance of tomorrow’s London G-20 meeting has written finance leaders advising them that any regulatory moves to fix the economic crisis should recognize the difference between banks and insurers.

The Geneva Association of 80 of the world’s biggest insurers signed a seven-page fine print letter to the G-20 finance ministers that was crammed with recommendations and critiqued flaws its sees in the Group’s latest action plan.

It said that the United Kingdom, the G-20 chair, had issued a February plan, shifting emphasis away from a 2008 G-20 declaration—with references “to banking failures (and banks as the focus for remedial action) [being] replaced by reference to ‘financial institutions.’”

“This raises concerns insofar as it risks blurring the particular differences that exist between the various financial services industries and could lead to confusion as to what specific actions will be directed at what specific type of institution.”

Distinctions between subsectors of the financial services industry “must be recognized in the work of the G-20 and national governments, as they were in the [2008] Washington declaration,” the executives wrote.

Among other points in the letter, the Association mentioned that their industry has $18.5 trillion in assets under management, and while bank lending has seized up insurance and reinsurance markets have been operating normally.

It said that “traditional insurers are much less susceptible to--nor may they originate--a ‘liquidity panic.’”

Regarding supervision and regulation, the letter advised, “Knee-jerk reactions must be avoided and reform should focus on those sub-sectors where regulatory deficiencies have been identified. There must be no automatic read-across of regulation to the insurance sector.”

To support resilience of insurers, the Association said “government intervention should be the absolute exception (only for systemic reasons) and accompanied with safeguards. Unfair competition with government money should not be allowed and open market access should be maintained.”