EUROPE - CEIOPS, the Committee of European Insurance and Occupational Pensions Supervisors, will monitor the avian influenza situation as it evolves.

“CEIOPS discussed the potential risks and consequences of avian flu,” the Frankfurt-based committee said.

“The present situation was considered along with the possible effects of any pandemic developments” at a meeting this week.

“CEIOPS members agreed to continue to monitor the position and to exchange relevant information between them as appropriate,” the committee said in a release.

The meeting followed a warning from the International Monetary Fund that pension and insurance regulators would need to be on watch if the disease hit financial markets. They might need to exercise “temporary forbearance” as markets tumble.

The Dutch Central Bank warned that bird flu could give the world economy one “considerable slap”.

“Not only banks are important to the Netherlands but also insurers and pension funds. A catastrophic death rate can affect the funding ratio of pension funds,” the DNB said.

Earlier, consulting firm Mercer said that a possible upside to a potential pandemic of avian influenza is that pension fund liabilities may be cut.