A public hearing on how to proceed with reinsurance collateral reforms that could be precipitated by the recently signed Bilateral Agreement Between the United States of America and the European Union (“EU”) on Prudential Measures Regarding Insurance and Reinsurance (“Covered Agreement”) has been scheduled for February 20, 2018 in New York City.
The hearing has been organized by the National Association of Insurance Commissioners (“NAIC”) and its Reinsurance Task Force. Registration is required.
To register, click here.
Specifically, Article 3 of the Covered Agreement would eliminate reinsurance collateral requirements for EU reinsurers that meet certain requirements. Thus, states will need to consider action with respect to reinsurance collateral reforms within 60 months or be subject to potential federal pre-emption.
To assist with direction on how to proceed, the NAIC anticipates giving stakeholders additional opportunity to make oral presentations at the public hearing; however, all interested parties are strongly encouraged to submit written comments and will be given priority during the hearing.
The NAIC requests specific comments on the following approaches to reinsurance collateral reform:
- Amending the Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) to eliminate reinsurance collateral requirements for EU-based reinsurers meeting the conditions of the Covered Agreement.
- Extending similar treatment to reinsurers from other jurisdictions covered by potential future covered agreement(s) that might be negotiated pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
- Providing reinsurers domiciled in NAIC Qualified Jurisdictions with similar reinsurance collateral requirements.
- Considering changes to the criteria for evaluating whether a jurisdiction should be a Qualified Jurisdiction.
- Considering additional “guardrails” relative to U.S. ceding companies, such as changes to the risk-based capital (RBC) formula or new regulatory approaches to help address the increased financial solvency risk caused by the elimination of reinsurance collateral.
- Any other considerations to weigh as part of the states’ implementation of the Covered Agreement.
To view the complete hearing notice, click here.
To view the entire Covered Agreement, click here.
February 20, 2018; 10:00 a.m. to 3:00 p.m. EST
Andaz Wall Street Hotel; 75 Wall Street; New York, NY 10005
Should you have any questions or comments, please contact Colodny Fass.