* Regulators call for consistent approach to insurers
* Big insurers, unlike big banks, don't need extra capital
* EU Solvency II rules unproven, won't be copied in U.S.
By Huw Jones
LONDON, June 18 (Reuters) - Insurers should not be forced to hold extra capital just because of their size, because the extra cost would simply be passed on to consumers, U.S. regulators said on Tuesday.
G20 world leaders have backed imposing extra capital requirements on the 30 or so biggest banks from 2016 to avoid a repeat of taxpayer bailouts seen during the financial crisis.
Global work on a similar regime for insurers is now in the final stages amid fierce debate over whether they must have added capacity to absorb losses like the biggest banks.
Firms are waiting to see who will be deemed systemically important under work led by the G20's Financial Stability Board (FSB). The U.S. Financial Stability Oversight Council (FSOC) will publish its own list shortly of systemic U.S. insurers.
U.S. insurance regulators called for consistency between the two lists to avoid an insurer being on one but not the other.
"That would create a lot more confusion than clarity," said Ben Nelson, chief executive of the National Association of Insurance Commissioners (NAIC), which groups state level insurance supervisors from across the United States.
Being on a list should also not automatically mean the insurer must have extra loss absorption capacity, Nelson and other U.S. regulators told Reuters during a visit to London.
"I don't think globally systemic insurers (GSIs), a this point, have been shown to require anything beyond that which is envisioned for the rest of the market," said James Donelon, insurance commissioner for Louisiana.
"I don't think we believe capital is the be-all-and-end-all answer. We are a little concerned about that being the primary regulatory tool being applied to these GSIs," added Jeffrey Johnston, a senior staff director at NAIC.
The United States represents a third of the world's insurance market and Adam Hamm, commissioner for North Dakota, said the FSB and FSOC decisions will have a "real world result".
"If there are costs to comply with regulations that these regulatory bodies come up with then what do you think is going to happen to the cost of insurance? It's going to go up," said Hamm, who is also NAIC's president elect.
Donelon, current NAIC president, said the U.S. industry's future will play out on the international stage and consistent rules are crucial to avoid costly overlaps.
The U.S. regulators are watching how the European Union is trying to finalise its long-delayed Solvency II capital rules for insurers, which the bloc hopes other countries will copy.
Nelson said Solvency II imposed a "bank centric" one-size fits all approach to insurer capital, while the other U.S. regulators played down any move to copy the EU framework.
"Not immediately and probably not in its entirety ever but we certainly are amendable to a common framework both systems can accommodate," Donelon said.
"What we are not interested in doing is throwing away a system that has served us well for over a hundred years."
Hamm said Solvency II has not yet been proven to work.
On the domestic front, NAIC said it expected tougher disclosure rules on insurers to who offload risk onto "captive" affiliates in a bid to cut down on expensive capital requirements.
Hamm said the planned move to principles-based reserving (PBR), a new set of NAIC rules for determining capital requirements at life insurers, will alleviate their need for capital and hence the need for captives. (Reporting by Huw Jones; Editing by Alden Bentley)