The Reinsurance Association of America (RAA) has commented on the recent release of the Federal Insurance Office’s (FIO) annual report on the insurance industry.
The report includes an update on the efforts of state legislatures which are adopting the 2019 Amendments to the National Association of Insurance Commissioners (NAIC) Credit for Reinsurance Model Law.
The FIO’s annual report echoed the previous guidance from the NAIC. It stated that the NAIC’s Reinsurance Task Force gave advice to the relevant NAIC Committee.
The advise that had been given was that the committee should recognise that states can and should begin immediately to adopt the revisions of state laws and regulations necessary to conform to the 2019 model revisions. This is “to best avoid potential federal preemption.”
Frank Nutter, president of the RAA commented: “The RAA applauds the 15 states that have passed the necessary legislation during a year plagued by the COVID-19 pandemic. But, while states are making good progress, we have a way to go.
“The timelines for compliance set forth in the Covered Agreements are not flexible. We urge state legislatures to make passage of the model law, and for state departments of insurance to make adoption of the model regulations, a top priority.
“The amendments to the Credit for Reinsurance model law strike the appropriate balance between giving U.S. ceding insurers access to global reinsurance capital providers, whilst ensuring that state insurance regulators have the appropriate information, international regulatory relationships and regulatory tools to protect U.S. ceding insurers and their U.S. policyholders.”
