REINSURANCE COLLATERAL, CREDIT AND SURPLUS LINES REGULATORY UPDATE
There has been a flurry of activity on the regulatory front on a variety of issues that the Dodd-Frank Act deferred to the states:
- The New York Department of Insurance has approved a reinsurance collateral regulation (effective 1/1/2011) which is somewhat similar to Florida’s regulation. The Department’s final review of comments submitted on the proposed regulation is also available. We will post a Special Focus piece on this new regulation soon.
- The NAIC: (1) has reinsurance collateral recommendations pending, which are being framed as accreditation issues; (2) has a proposal under consideration for a surplus lines interstate compact; and (3) may consider amendments to the model acts and regulations regarding reinsurance credit. According to some media reports, there has been some disagreement within the NAIC as to the scope of the NAIC’s surplus lines initiative, with some states seeking to limit the scope to premium tax issues and a larger number seeking to broaden the scope to cover other areas of surplus lines operation mentioned in Dodd-Frank. The proponents of the narrower premium tax only approach apparently are prevailing
- NCOIL recently approved a proposal addressing various surplus lines issues, but has not been active on the reinsurance collateral issue. Unlike the relatively narrow NAIC approach, NCOIL’s surplus lines proposal addresses not only premium tax issues, but also other issues, including some related to eligibility, brokerage and placement activities.
This post written by Rollie Goss.
