The National Association of Insurance Commissioners (NAIC) has approved revisions to both the Credit for Reinsurance Model Law and Credit for Reinsurance Model Regulation.
The revisions look to further resolve any difference in the treatment of U.S. domiciled insurers that operate offshore. Under the revisions, the models are now consistent with provisions of covered agreements in the European Union (EU) and the UK, with respect to reinsurance collateral requirements.
The NAIC explains that the changes made will provide reinsurance companies domiciled in NAIC-qualified jurisdictions outside of the EU, which currently includes Switzerland, Bermuda, and Japan, with the possibility of similar reinsurance collateral reductions.
Revisions made to the model were considered by the membership and included discussion from stakeholders, companies, and the federal government.
U.S. states must comply with the provisions in the covered agreement within five years of the signing of the covered agreement with the EU, which was signed on September 22nd, 2017.
Eric Cioppa, NAIC President and Maine Insurance Superintendent, said: “These changes underscore the commitment of U.S. insurance regulators to resolving any disparate treatment of U.S. insurance firms operating abroad. I encourage my colleagues to work with their state legislatures to pass these updates quickly.”
