On November 6, 2013, the Federal Insurance Office (FIO) released its 2013 Report on the Impact of Part II of the Nonadmitted and Reinsurance Reform Act (NRRA). The purpose of the NRRA, which became effective on July 21, 2011, is to improve the uniformity of state regulation of reinsurance and surplus lines insurance. In particular, the NRRA prohibits a non-domiciliary state regulator from requiring a reinsurer to provide financial information in addition to what the reinsurer currently provides to its domiciliary state regulator, because the domiciliary state regulator is responsible for monitoring the reinsurer’s financial solvency.
According to the report’s findings, “state regulators did not express any concern with respect to the impact of the provisions in Part II of the NRRA and the ability promptly to receive from another state regulator needed financial information with respect to a reinsurer.” While a few state regulators speculated that there could be problems in the future as a result of Part II of the NRRA, there was no factual basis to support such concerns. The Reinsurance Association of America (RAA) also indicated that “its members are unaware of any situation in which a state regulator has been unable to obtain information in which it had an interest.” Consequently, FIO concluded that Part II of the NRRA has not had an adverse impact on the availability of reinsurer’s financial information. FIO intends to update the report in 2015.
For a copy of the complete report, click here