Reinsurance Focus

New reinsurance-related and arbitration developments from Carlton Fields

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Reinsurance Regulation

LEGISLATIVE UPDATE

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Following are legislative developments relevant to state captive insurance laws:

  • The Montana State Auditor requested House Bill No. 160, which was adopted by the Montana legislature to revise captive insurance laws, authorize the Insurance Commissioner to waive RBC reports for captive risk retention groups, clarify collection of the premium tax, change the calculation of the tax on direct premiums, revise investment requires for captive insurers, and expand the scope of laws applicable to captive insurance companies. The effective date of the legislation is July 1, 2009.

  • SP 520 has been introduced in the Maine Senate, which amends the State's laws regulating captive insurance companies to encourage the formation of new captive insurance companies in the State. The amendments are modeled after laws relating to captive insurance companies in Vermont. The bill has been referred to the Committee on Insurance and Financial Services.

Following are legislative and regulatory developments relevant to reinsurance:

  • Senate Bill No. 442 has been introduced in the Maine Senate to repeal the Maine Individual Reinsurance Association and enact the Health Insurance Individual Small Group Reinsurance Fund to provide reimbursement of certain high-cost claims for persons covered under individual and small group health plans.

  • North Dakota SB 2181 was recently signed into law. The law amends and reenacts portions of N.D. Code § 26.1-06.1-31, which deals with reductions in amounts recoverable by liquidators from reinsurers.

There are three Congressional bills of interest:

  • H.R. 1583 proposes to repeal the insurance industry's antitrust exemption through amendment of the McCarran-Ferguson Act. The bill has been referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, and Financial Services

  • H.R. 83 (referred to the Committee on Financial Services) (bill text and bill summary) proposes a program to provide reinsurance for State natural catastrophe insurance programs, and S. 505 (referred to the Committee on Banking, Housing, and Urban Affairs) proposes the establishment of a National Catastrophe Risks Consortium and a National Homeowners' Insurance Stabilization Program.

This post written by Karen Benson.

UPDATE ON ANALYSIS OF NAIC CONSIDERATION OF REINSURANCE REGULATORY MODERNIZATION AND COLLATERAL CHANGES

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On April 13, 2009 we posted about the actions of the NAIC, at its recent meetings, to move forward on the regulation of reinsurance, collateral for reinsurance agreements and the modification of credit for reinsurance rules. Our partner Tony Cicchetti has posted a more detailed analysis of the regulatory and collateral proposals on several occasions, and he has updated that analysis to provide a comprehensive view of these issues.

This post written by Tony Cicchetti.

NEW YORK DEPARTMENT OF INSURANCE PROPOSES MANDATORY CATASTROPHE RESERVES FOR P&C COMPANIES

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The New York Insurance Department has proposed Regulation 189 – Mandatory Catastrophe Reserves for Property/Casualty Insurance Companies. The rule proposal would require every authorized property/casualty insurer issuing a policy of insurance or contract of reinsurance covering losses resulting form a catastrophe to property located in New York, and receiving New York subject premiums, to establish a New York mandatory contingent catastrophe reserve, which shall only be used toward the payment of claims from qualifying losses. In developing this rule proposal, the Department reviewed the research of the NAIC – Catastrophe Insurance Working Group, Casualty Actuarial Society, and performed outreach to property/casualty insurers, consumer groups, and other interested parties. The Department has published the text of the proposed regulation, and the Notice of Proposed Rulemaking notes that comments will be accepted until 45 days after the publication of the Notice. The comment period closes May 26, 2009.

This post written by Karen Benson.

NAIC CONSIDERATION OF REINSURANCE REGULATORY MODERNIZATION AND COLLATERAL CHANGES PROCEEDS

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At the spring meeting of the NAIC, the Reinsurance Task Force (meeting summary) voted not to proceed with a proposed reinsurance collateral model bulletin, but voted to expose a proposed reinsurance collateral guidance memo for a comment period ending April 23, 2009. The Task Force also voted to expose for a comment period a draft of a federal statute for a reinsurance regulatory modernization framework (comment period expires April 23, 2009). The desire is to submit the proposed bill for consideration by Congress in the current session. The Finance (E) Committee adopted the report of the Task Force (meeting summary).

This post written by Rollie Goss.

CASE CLOSED: EASTERN DISTRICT OF PENNSYLVANIA DISMISSES DI LORETO’S CLAIMS

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We have previously reported on the procedurally tortured case between the New York Insurance Department, as liquidator of Nassau Insurance Company, and Jeanne Di Loreto to recover assets contended to have been diverted from Nassau. In the latest salvo, defendants New York Insurance Department, William Costigan, and Eric DiNallo, Mark Peters and Andrew Lorin separately moved to dismiss plaintiff Di Loreto’s Complaints seeking to prevent execution of a judgment obtained against her by the New York Liquidation Bureau. The court granted all three motions to dismiss, finding that it lacked jurisdiction over the New York Department, and that the other claims failed to state a claim. Di Loreto v. Costigan, et al., Case Nos. 08-989, 08-990 (USDC E.D. Pa. Feb. 19, 2009).

This post written by John Black.