Reinsurance Focus

New reinsurance-related and arbitration developments from Carlton Fields

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Carlton Fields

NAIC COLLATERAL PROPOSALS ADVANCE

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The NAIC's Reinsurance Task Force's proposals for modernization of U.S. reinsurance regulation have advanced. At a December 2 meeting, the Task Force adopted the proposed reinsurance regulatory framework with some minor revisions and discussed the possibility of an interim meeting in late January 2008 to address various aspects of the proposal. The Financial Condition (E) Committee adopted the report of the Reinsurance Task Force, including the reinsurance framework proposal, at its December 4 meeting.

This post written by Rollie Goss.

FLORIDA PROPOSES NEW REINSURANCE CREDIT/COLLATERAL RULE

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The State of Florida has proposed a new rule permitting a ceding insurer to take credit, as an asset or deduction from reserves, for reinsurance ceded to an eligible reinsurer based not upon the posting of collateral, but rather upon the reinsurer holding surplus in excess of $100 million and a stand-alone financial strength rating from at least two rating agencies. The amount of the credit allowed varies depending upon the reinsurers' financial rating.

This post written by Rollie Goss.

HAPPY HOLIDAYS FROM REINSURANCE FOCUS

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The staff of Reinsurance Focus wishes all of our readers a very happy holiday season. We hope that you have a good time with your families and are able to forget all about reinsurance and arbitration for a while and enjoy the holidays.

Rollie Goss, Lynn Hawkins and our contributors

CONNECTICUT SUPREME COURT VACATES SUMMARY JUDGMENT INTERPRETING REINSURANCE AGREEMENT

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On September 24, 2007, we reported on a Connecticut Supreme Court decision addressing issues relating to a request for the posting of pre-pleading security in a case involving the interpretation of a reinsurance agreement covering losses on general liability insurance policies arising from claims for insuries resulting from the underlying insured's production and use of products containing asbestos. On remand, the principal issue on the merits of the dispute revolved around language in the reinsurance agreement relating to aggregation of losses and the definition of occurrence. The trial court granted summary judgment on that issue to the reinsurers. The Supreme Court has reversed, finding that there are disputed issues of material fact which preclude the determination of the interpretation issues in a summary judgment posture. Hartford Accident and Indemnity Co. v. Ace American Reinsurance Co., SC 17625 (officially released Dec. 25, 2007).

This post written by Rollie Goss.

HOUSE PASSES TRIA EXTENSION

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By a vote of 360-53, the House has passed a seven year extension of the Terrorism Risk Insurance Act. The enacted version mirrors the version passed by the Senate, which does not include coverage for nuclear, biological and chemical attacks or credit life insurance. Although the Bush administration favors not renewing TRIA, there have been indications that the President would sign a bill such as the one passed by the House.