A National Association of Insurance Commissioners' task force has set the stage for likely approval of state accreditation standards for regulation of risk retention groups in December.
The agreement constitutes a breakthrough because some commissioners had recently voiced concern that allowing some states to deviate from the NAIC Model Law on Credit for Reinsurance would provide too much discretion and undermine the purpose of the model law, which is to ensure solvency of RRGs.
"I think we're focusing on the right issue now, which is the standards set forth in the proposed regulation, which determines the commissioner's exercise of discretion," said Robert Myers Jr., general counsel of the National Risk Retention Association, the trade group for RRGs.
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