Proposed new California regulations concerning credit for reinsurance have sparked insurance industry concerns that they may put domestic and certain licensed companies in that state at a competitive disadvantage.
Right now all states operate under the National Association of Insurance Commissioners credit for reinsurance model law, which is designed to prevent insurers from going insolvent due to reliance on financially shaky reinsurers.
But the proposed new California regulations will set stricter standards for both the state's domestic companies and those licensed companies that have 20 percent of their business in the state.
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