Comments have now been submitted to the National Association of Insurance Commissioners’ (“NAIC’s”) Reinsurance Task Force in advance of a February 20, 2018 public in New York City 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”)
The hearing, registration for which is now closed, was organized by the NAIC, which had requested 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.
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.
Hyperlinks to the submitted comments are below and also accessible along with the February 20 meeting materials here.
- ABIR (Association of Bermuda Insurers and Reinsurers)
- American Academy of Actuaries
- American Insurance Association
- California Department of Insurance
- Cincinnati Insurance Companies
- CNA Insurance
- GDV (German Insurance Association)
- General Insurance Association of Japan
- International Underwriting Association
- Lloyd’s America
- NAMIC (National Association of Mutual Insurance Companies)
- RAA (Reinsurance Association of America)
- Swiss Re Americas and Zurich North America
- Switzerland Federal Department of Finance
- XL Catlin
To view the complete hearing notice, click here.
To view the entire Covered Agreement, click here.