NAIC says progress made on reinsurance proposal

The National Association of Insurance Commissioners released a proposal on Nov. 16 that aims to modernize regulation of reinsurance in response to changes in the global insurance marketplace.
During a meeting held Nov. 7 and 8 in Atlanta, the NAIC Reinsurance Task Force received comments from U.S. and European ceding insurers and reinsurers on the draft proposal, the association said in a news release. 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, in a news release. “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 report last year by the Reinsurance Association of America 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 aims 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.
• A Reinsurance Supervision Review Department to determine which jurisdictions are entitled to enter into mutual recognition agreements.
The task force and the Financial Condition Committee will consider the proposal, along with any comments received by Nov. 28, at the Winter National Meeting, Dec. 2 to 4 in Houston.
For more information about the proposal, visit www.naic.org/committees_e_reinsurance.htm.