The minutes of the April 4, 2016 task force meeting (available here) included the following seven items of activity:
- Adopted its Jan. 6, 2016 and Dec. 9, 2015 minutes (which were attached), which reflected the adoption of revisions to the Credit for Reinsurance Model Law (#785).
- Received a status report from the Qualified Jurisdiction (E) Working Group.
- Adopted the report of the Reinsurance Financial Analysis (E) Working Group, which had reviewed and recommended three renewals for certified reinsurer passporting purposes, and discussed and made revisions to the Uniform Application Checklist for Certified Reinsurers (attached to the minutes).
- Requested an extension from the Financial Condition (E) Committee in order to continue working on a proposed XXX/AXXX Credit for Reinsurance Model Regulation (Model Regulation).
- Discussed comments received on the Feb. 26 draft of the Model Regulation (attached to the minutes) and the accompanying NAIC staff memorandum (also attached), which details the revisions made from the prior exposure draft. Comment letters were received from a handful of organizations, state regulators, and insurance companies. Affiliated captive reinsurance was addressed as a significant focus area for several federal agencies. Several reports published by these agencies were discussed detailing significant concerns with the use of affiliated captive reinsurance. A comment letter from the Life Actuarial (A) Task Force submitted to the Reinsurance (E) Task Force was also discussed (attached to the minutes).
- Adopted the recommendation of the Valuation of Securities (E) Task Force to expand the NAIC Bank List, which is used by insurers to identify letters of credit that can be used as collateral in reinsurance transactions under Model #785, to include eligible non-bank financial institutions. Proposed amendments to the Purposes and Procedures Manual of the NAIC Investment Analysis Office and an executive summary from the Securities Valuation Office were attached to the minutes.
- Discussed reinsurance collateral next steps. Regarding the states’ implementation of the revised Model #785 and Credit for Reinsurance Model Regulation (#786), to date 32 states have passed legislation to implement the revised Model #785, with 22 of those states enacting Model #786 as well. Insurers domiciled in these states represent more than 66% of the direct insurance premium written in the U.S. across all lines of business.
This post written by Michael Wolgin.
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