NAIC Helping Berkshire Bond Operation Expand

The president of the National Association of Insurance Commissioners said the group is taking steps to bolster municipal bond insurers and expand the licensing of Berkshire Hathaway's new bond operation to other states.

Kansas Insurance Commissioner Sandy Praeger, the NAIC president, said the organization is currently working with Berkshire Hathaway Assurance Corporation to submit an Expansion Application using the NAIC's Uniform Certificate of Authority Application (UCAA). The UCAA provides a streamlined, uniform application process for insurers seeking to do business in multiple states.

Ms. Praeger noted that New York Insurance Superintendent Eric Dinallo had recently facilitated an accelerated license approval of Berkshire Hathaway Assurance Corp. to write financial guaranty insurance in New York State.

“In order to create market demand for their issues, states and municipalities need access to financial guaranty insurance from a triple A-rated insurer,” Ms. Praeger said. “We are taking any and all necessary steps – including the expedited licensure of companies like Berkshire–to ensure a healthy and competitive insurance market.”

NAIC members, she said had met to discuss regulatory solutions to ensure the continued strength and stability of the financial guaranty insurance market.

“State insurance regulators are working together so that all states and municipalities will have continued access to highly rated financial guaranty insurers,” Ms. Praeger advised.

In addition to Mr. Dinallo's actions in New York, she marked the fact that Wisconsin Insurance Commissioner Sean Dilweg has been working closely with Ambac Financial, the largest writer of financial guaranty insurance, to develop a plan to ensure the company remains stable and well-capitalized.

“New York and Wisconsin have brought leadership to this issue, in a way that will help us quickly and effectively enact proactive solutions to protect America's insurance consumers,” said Ms. Praeger.

She added that regulators, as part of a three-part plan to address the bond market, will continue to closely monitor financial guaranty insurers to assess their potential for distress.

They will also, she said, be assessing the need for new laws or regulations and they will be facilitating the speedy entrance of well-capitalized companies into the bond insurance marketplace.