New reinsurance-related and arbitration developments from Carlton Fields
Last month we posted a short item on the progress of the NAIC’s reinsurance regulation proposal at its Fall Meetings. We now present a Special Focus feature, providing additional context and detail with respect to the NAIC’s actions.
This post written by Rollie Goss.
On June 13, 2009, the NAIC exposed for comment Issue Paper No. 137, which proposed changes to Statement of Statutory Accounting Principle No. 62 – Property and Casualty Reinsurance (SSAP No. 62). The proposed change provides an exception to accounting principles for retroactive reinsurance agreements for reinsurance and/or retrocession agreements that meet the criteria of property and casualty run-off agreements described in the issue paper. This proposal has progressed to the stage that a proposed amendment to SSAP No. 62 has been exposed for comment. The comment period expires October 28, 2009. A public hearing will be held on the proposal, and interested parties may submit written comments and/or seek to speak at the hearing. For more information, go to the web pages of the NAIC’s Statutory Accounting Principles Working Group.
This post written by Rollie Goss.
In response to the financial crisis, eleven chief executive officers have formed the Global Reinsurance Forum (the “Forum”), which seeks to, among other things, represent industry positions before regulatory and supervisory organizations and advocate for a global, reasonable framework for the growth of reinsurance markets. Membership to the Forum will be limited to the chief executive officers, and business issues, such as prices, terms, and conditions, will not be discussed. A press release describes this new organization.
This post written by Dan Crisp.
The District Court for the District of New Jersey recently granted defendant AIG’s motion to dismiss Robert Plan Corporation’s claims arising out of a series of reinsurance agreements between the parties. The procedural history of the action is complex, and it involves underlying state court action, financial rehabilitation and bankruptcy proceedings. Robert Plan filed a Notice of Removal in January, 2009, and AIG subsequently moved to dismiss for lack of subject matter jurisdiction. The court granted the motion to dismiss, finding that that there was no case or controversy for the court to decide because the underlying state court action had been dismissed by the time plaintiffs filed their notice of removal. Additionally, because the Court found subject matter jurisdiction lacking, it denied as moot Robert Plan’s Motion to Transfer Venue. The Robert Plan Corp. v. American Int’l Group, Case No. 09-200 (D.N.J. Aug. 10, 2009).
This post written by John Black.
On September 15, 2009, the National Association of Insurance Commissioners approved for submission to Congress the Reinsurance Regulatory Modernization Act of 2009, which would alter state regulation of reinsurance, and provide for federal preemption. If enacted, the legislation would create two new classes of reinsurers: national reinsurers (United States) and port of entry reinsurers (non-United States). To transact reinsurance business in the United States, national reinsurers would be licensed through a single home state. Port of entry reinsurers would be certified through a single port of entry state. At their election, reinsurers also could continue operating under the existing regulatory regime. The legislation also provides for the establishment of the Reinsurance Supervision Review Board as a federal entity responsible for evaluating states and non-United States jurisdictions. State insurance regulators would be responsible for evaluating national and port of entry reinsurers and establishing collateral requirements for reinsurance agreements. Conflicting state laws oncredit requirements would be preempted as to national and port of entry reinsurers.
This post written by Brian Perryman.