What does Regulatory Risk mean? Read on to discover the definition & meaning of the term Regulatory Risk - to help you better understand the language used in insurance policies.
The risk that a change in laws and regulation will significantly impact an institution. A change in laws or regulations enacted by a governmental or regulatory body can dramatically increase the costs of conducting a business, decrease the attractiveness of an investment, or change the competitive landscape. For example, regulatory risks arising from climate change concerns include (1) more vigorous disclosure requirements regarding a manufacturer's emissions and (2) the emergence of minimum performance standards tied into energy consumption and greenhouse gas emission controls.
We hope the you have a better understanding of the meaning of Regulatory Risk.