The Risk and Insurance Management Society, Inc. (RIMS) is encouraged that the National Association of Insurance Commissioners (NAIC) has approved the Reinsurance Regulatory Modernization Framework Proposal at its recent Winter National meeting.
NAIC's adoption of the Framework is a small step forward in the process of developing a new regulatory regime for reinsurance; however, many details remain to be worked out.
The NAIC reinsurance task force proposal creates two classes of reinsurers in the United States. One class is for reinsurers domiciled in the United States and the second is for non-United States based port of entry (POE) reinsurers. Features of the new framework include modified collateral requirements for eligible entities, new state-based reinsurance regulations based on supervisory recognition, single-state licensure for United States reinsurers and single-state certification for non-United States reinsurers from approved jurisdictions.
RIMS is hopeful that this modified regulatory framework, when fully implemented, will result in additional capacity and the equitable and efficient regulation of the reinsurance industry in a manner that meets the needs of commercial policyholders.