FOR IMMEDIATE RELEASE

NAIC Updates to Credit for Reinsurance Model Law and Regulation
State regulators pave the way for implementation of covered agreements

WASHINGTON (June 25, 2019) — In a meeting of the National Association of Insurance Commissioner (NAIC) Plenary, the association approved revisions to the Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786). These changes make the models consistent with provisions of covered agreements with the European Union and United Kingdom with respect to reinsurance collateral requirements.

In addition to conforming to the requirements in the covered agreements, these changes will provide reinsurers domiciled in NAIC-qualified jurisdictions other than within the EU (currently, Bermuda, Japan and Switzerland) with the possibility of similar reinsurance collateral reductions. Revisions to the model were considered by the membership and included input from stakeholders, companies and the federal government.

"These changes underscore the commitment of U.S. insurance regulators to resolving any disparate treatment of U.S. insurance firms operating abroad," said Eric A. Cioppa, NAIC President and Maine Insurance Superintendent. "I encourage my colleagues to work with their state legislatures to pass these updates quickly."

States must comply with the provisions in the covered agreement within five years of the signing of the covered agreement with the EU or face potential preemption by the Federal Insurance Office (FIO). The agreement was signed on Sept. 22, 2017.

About the NAIC

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. For more information, visit www.naic.org.

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