NAIC Reinsurance Proposal Makes Progress

 

The following was just released by the National Association of Insurance Commissioners (“NAIC”) regarding its proposal for reinsurance modernization:

 

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FOR IMMEDIATE RELEASE

REINSURANCE PROPOSAL MAKES PROGRESS

Provides Roadmap for Responding to Change in Marketplace

KANSAS CITY, Mo. (Nov. 16, 2007) — The National Association of Insurance Commissioners (NAIC) today released its Reinsurance Regulatory Modernization Proposal, aimed at responding to change in the global insurance marketplace.

During a meeting held Nov. 7 – 8 in Atlanta, the NAIC’s Reinsurance Task Force received comments from U.S. and European ceding insurers and reinsurers on the draft proposal. The task force also heard a presentation on the treatment of non-European insurers in Europe before and after the new EU reinsurance directive.

“I am pleased with the discussion among all stakeholders at our meeting last week,” said Georgia Insurance Commissioner John Oxendine, who chairs the Task Force. “Based on our discussions, I fully expect the task force to meet its December deadline for presenting their vision of the way forward on this issue of vital importance to the continued strength of the U.S. insurance market.”

A 2006 Reinsurance Association of America (RAA) report noted that non-U.S. reinsurers assume more than 50 percent of the reinsurance ceded by U.S. insurers, and more than 80 percent when considering affiliated transactions.
The draft reinsurance proposal is designed to facilitate such cross-border transactions and enhance competition within the U.S. market, while ensuring that U.S. insurers and policyholders are adequately protected from a solvency perspective. It includes the concepts of:

 

• A single-state U.S. regulator for U.S. reinsurers;
• A single-state U.S. regulator for non-U.S. reinsurers from approved jurisdictions; and
• A Reinsurance Supervision Review Department (RSRD) to determine which jurisdictions are entitled to enter into mutual recognition agreements.

 

“This new framework will serve as a roadmap for future work,” said NAIC President and Alabama Insurance Commissioner Walter Bell. “We will continue to meet the challenge of keeping pace with a rapidly globalized insurance community, of maintaining an open and competitive market and, most important, of continuing to provide the necessary protection to consumers of insurance products in the United States.”

The NAIC’s Reinsurance Task Force and Financial Condition Committee will consider the draft proposal, along with any comments received by Nov. 28, during the Winter National Meeting, Dec. 2 – 4 in Houston.

 

For more information about the Reinsurance Regulatory Modernization Proposal, visit www.naic.org/committees_e_reinsurance.htm.

For more information about the Winter National Meeting, visit www.naic.org/meetings_home.htm.

 
About the NAIC
Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC at www.naic.org/press_home.htm.

 

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