Reinsurance Modernization Proposal Revealed To Worldâ€™s Regulators
Oct 17, 2007 | By Colodny Fass
The International Association of Insurance Supervisors held the first full day of its 14th Annual Conference, at which Florida Attorney General Bill McCollum gave one of the keynote speeches.
Later, a panel entitled â€œReinsurance: The Avenue Towards Mutual Recognition” examined reinsurance supervision on the basis of globally accepted principles and the maintenance of global financial stability. Reinsurance experts discussed the challenges of doing business globally; US proposals for reform to reinsurance regulation; European Union experience on mutual recognition; and the use of rating agencies in reinsurance supervision.
Below are links to biographies of participants on today’s â€œReinsurance: The Avenue Towards Mutual Recognition” panel:
Panel Chair : Steven Goldman â€“ Chair, IAIS Reinsurance and Other Forms of Risk Transfer Subcommittee (New Jersey/USA)
Matt Mosher â€“ AM Best (USA)
Alastair Evans â€“ Lloyd’s (United Kingdom)
Robert Meindl â€“ Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin)
Jeremy Cox – Bermuda Monetary Authority (Bermuda)
The National Association of Insurance Commissioners issued the press release below following today’s presentation, at which it introduced a proposal to comprehensively modernize reinsurance regulation.
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Reinsurance Modernization Proposal Revealed To Worldâ€™s RegulatorsÂ
Goals Include Mutual Recognition, Financial Stability
and ‘Functional Equivalence’
FORT LAUDERDALE, Fla. (Oct. 17, 2007) â€” The National Association of Insurance Commissioners (NAIC) today debuted to its international insurance regulatory counterparts a proposal to comprehensively modernize reinsurance regulation in the United States.
The proposal was shared at the 14th Annual Conference of the International Association of Insurance Supervisors (IAIS) during a panel titled, â€œReinsurance: The Avenue Towards Mutual Recognition.â€ The panel was hosted by New Jersey Insurance Commissioner Steven Goldman, who serves as chair of the IAIS Reinsurance and Other Forms of Risk Transfer Subcommittee.
â€œAs regulators of the worldâ€™s largest insurance market, NAIC members are committed to ensuring that our standards remain compatible with supervisory practices worldwide,â€ Goldman said. â€œOur objective with this proposal is to align U.S. reinsurance regulation more closely with international standards, while allowing for the flexibility that our nationâ€™s financial services marketplace requires.â€
Developed by a subgroup of the NAICâ€™s Reinsurance Task Force, the proposal calls for amending the existing regulatory framework to allow for single-state licensing of U.S. reinsurers, and encourages the NAIC to develop a Reinsurance Supervision Review Department (RSRD).
The RSRD would assist in the evaluation of the extent to which non-U.S. jurisdictions apply regulatory oversight that is â€œfunctionally equivalentâ€ to U.S. regulation. Under the proposal, non-U.S. reinsurers domiciled in â€œfunctionally equivalentâ€ jurisdictions would be allowed to access the entire U.S. market through a single port of entry state.
â€œWe hope to facilitate cross-border transactions and enhance competition within the U.S. market, while ensuring that insurers and policyholders are adequately protected from a solvency perspective,â€ Goldman added. â€œBy working closely with insurance supervisors from around the world, we hope to move closer to our ultimate goals of mutual recognition and global financial stability.â€
The NAICâ€™s Reinsurance Task Force will discuss this proposal further during a meeting Nov. 7-8, 2007, held in conjunction with the NAIC Financial Summit in Atlanta. For more information, visit www.naic.org/committees_e_reinsurance.htm.
For more information about the 2007 IAIS Annual Conference, visit www.2007iais.org.
For the text of NAIC President Walter Bell’s Welcome Speech to the IAIS 14th Annual Conference, click here.