6/13/13 - Regulation of Captives
"State insurance regulators continue to assess and monitor the risks that captives and special purpose vehicles (SPVs) may pose to insurers. State regulators have conducted a great deal of work to examine the issues surrounding the use of captives and ways to enhance the regulatory framework and provide insurance departments standardized tools and processes for reviewing such transactions. The NAIC has a number of groups focused on examining complex issues including transparency and disclosure, accounting treatment and confidentiality. A top priority of the NAIC is ongoing implementation of principle-based reserving (PBR), which seeks to address, among other things, the perceived reserving redundancies that have precipitated the use of captives for reserving purposes. Ongoing work on PBR will also specifically examine the solvency, surplus, and risk based capital impact caused by the use of captives and SPVs."