The National Association of Insurance Commissioners gave preliminary approval last week to a new scheme to replace the current 100 percent collateral requirement for foreign reinsurers doing business in the United States.
A resolution passed here at the NAIC winter meeting by the Reinsurance Task Force was sent to the Financial Condition Committee. It calls for the creation of a new Reinsurance Evaluation Office under the aegis of the NAIC to rate the creditworthiness of all reinsurers without regard to jurisdiction, and assign collateral requirements accordingly.
Earlier this month, the Task Force revised the proposal to exempt from collateral requirements all domestic reinsurers in the top-three rating categories. The move was seen as a nod to U.S. reinsurers that complained the original proposal would leave no reason for any reinsurer to obtain a U.S. license.
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