We Make You Insurance Smart

The National Association of Insurance Commissioners (NAIC) has moved ahead with its plan to reform the reinsurance industry.

NAIC recently adopted its Reinsurance Regulatory Modernization Framework Proposal, which updates the state-based regulation of reinsurance. However, Steven M. Goldman, New Jersey Banking and Insurance Commissioner and chairman of NAIC''s Reinsurance Task Force, which drafted this proposal, was quick to point out that it''s only a "conceptual framework."

"Now, we must focus on developing the specifics of this new regulatory regime and taking the appropriate legislative steps to make the proposal a reality," Goldman added.

The proposal creates two classes of reinsurers in the United States: U.S.-domiciled national reinsurers and non-U.S.-based port of entry (POE) reinsurers. It also introduces modified collateral requirements for eligible reinsurers. In addition, the proposal establishes a framework for state-based reinsurance regulation based on supervisory recognition, single-state licensure for U.S. reinsurers, and single-state certification for non-U.S. reinsurers from approved jurisdictions.

In regards to non-U.S.-based reinsurers, the proposal suggests the creation of the NAIC Reinsurance Supervision Review Department (RSRD), which would evaluate the reinsurance supervisory regimes of other countries and establish standards for a state to be certified to regulate reinsurance across borders. In order to be certified as a POE reinsurer, a reinsurer must be licensed by a non-U.S. jurisdiction that the RSRD recommends as eligible for recognition.


Added on: Mon Dec 15, 2008 3:51 pm by : masteris009