Reinsurance Regulation

The National Association of Insurance Commissioners recently published a revised version of its proposed Reinsurance Regulatory Modernization Act of 2009. We reported on the original version, but the July 27, 2009 edition of the bill includes several important changes. Highlights include:

• Completely redrafting of the “Membership” portion of the bill, detailing the composition and purpose of the Reinsurance Supervision Review Board (Section 3);
• Expanded the Board’s Home State and Port of Entry Standards as well as amending the Authority to Enter Agreements with Qualified Non-US Jurisdiction Supervisors (Section 4);
• Inclusion of a section of the bill detailing the requirements for National and Port of Entry Reinsurers (Section 5);
• An expanded section explaining Preemption of Inconsistent State Laws and Actions (Section 6);
• A newly drafted Right of Review provision (Section7); and
• An explanation of the Duties of Board (Section 9).

The NAIC also published a redlined version, showing the changes from the original version.

This post written by Brian Perryman.

• On July 21, 2009, Florida Senators Bill Nelson and Mel Martinez introduced S. 1486, a bill to amend the Internal Revenue Code of 1986 to provide for the creation of disaster protection funds by property and casualty insurance companies for the payment of policyholders’ claims arising from future catastrophic events. The bill was referred to the Senate Committee on Finance.

• That same day, Florida Senators Bill Nelson and Mel Martinez introduced S. 1487, a bill that establishes a bipartisan commission on catastrophic disaster risk and insurance. The bill was referred to the House Committee on Banking, Housing, and Urban Affairs.

• On July 30, 2009, Representative Richard E. Neal of Massachusetts introduced H.R. 3424, a bill to amend the Internal Revenue Code of 1986 to disallow the deduction for excess non-taxed reinsurance premiums with respect to the United States risks paid to affiliates. The bill was referred to the House Committee on Ways and Means.

This post written by Karen Benson.

Following are selected bills in the reinsurance area that were recently introduced or adopted in the state or federal legislature:

• S. 5994 was recently introduced in the New York Senate to permit mortgage guaranty insurers to obtain credit for reinsurance in a manner conforming to the requirements prescribed by the Superintendent of Insurance. The bill was referred to the Rules Committee.
• Oregon enacted House Bill No. 2755 (mentioned in our May 8, 2009 post), which requires the Department of Consumer and Business Services to conduct a study of options available for utilizing reinsurance and other mechanisms for spreading risk in individual and small employer group health insurance markets and submit a report to the Legislative Assembly by December 1, 2010.
• A companion bill, S 1363, to H.R. 2571 (mentioned in the June 9, 2009 post) was introduced in the U.S. Senate. The bill proposes to streamline the regulation of non-admitted insurance and reinsurance, and it contains the same principal provisions addressed in H.R. 2571, which were described in our June 9, 2009 post. The bill was referred to the Senate Banking, Housing, and Urban Affairs Committee.

This post written by Karen Benson.