The Reinsurance (E) Task Force (“Task Force”) NAIC Spring Meeting covered a variety of reports and initiatives, however the bulk of the meeting focused on the certification process for reinsurers. The Task force adopted the Reinsurance Financial Analysis (E) Working Group Report, and noted that 24 companies are now available for “passporting,” whereby if an applicant for certification has been certified as a reinsurer in an NAIC-accredited jurisdiction, a commissioner has discretion to defer to that jurisdiction’s certification and assigned rating. In addition, the Uniform Application Checklist for Certified Reinsurers was exposed for a 30-day comment period. The checklist aims to give guidance to reinsurers for certification and passporting purposes. At this point, the Task Force made it clear that no memoranda of understanding are required between states during the passporting process, but instead states may go to NAIC online databases to review pertinent information.
The Task Force also noted that 19 states have now adopted the revised Credit for Reinsurance Model Law and Credit for Reinsurance Model Regulation, representing over 50% of all national premiums.
The Task Force then gave an update on discussions with the EU with respect to equivalence. Commissioner Consedine noted that, while equivalence will not be achieved, both sides agree that mutual recognition must occur. Comments from industry participants drew views from the Task Force that hopefully more progress will be made between April and mid-Summer of 2014.
The Task Force proceeded to discuss the prospect of a re-examination of collateral amounts set forth in Revised Model Regulations 785 and 786. The Task Force concluded that surveys would be sent out to regulators and industry participants in the next few weeks to analyze whether collateral requirements should be changed.
The last substantive topic the Task Force addressed was the use of captive insurers. The Task Force recognized the efforts of other NAIC committees, however did not undertake a critical analysis of the topic, instead mostly deferring to other committees.