Non-US reinsurers get raw end of deal
After months of discussion, the US National Association of Insurance Commissioners (NAIC) has formally adopted a framework to reform US reinsurance regulation.
The regulation will require non-US reinsurers to post 100% collateral for their US liabilities while US-based reinsurers will post none, regardless of their ratings.
The regulators said in a statement that the new framework will “enhance competition within the US market while ensuring US insurers and policyholders are protected against the risk of insolvency”.
They will also set up a new entity called the Reinsurance Supervision Review Department, which will decide which non-US jurisdictions can enter into mutual recognition agreements.
Non-US reinsurers could then be certified to access the US market through one jurisdiction, referred to as the reinsurer’s “port of entry”.
The regulation will require non-US reinsurers to post 100% collateral for their US liabilities while US-based reinsurers will post none, regardless of their ratings.
The regulators said in a statement that the new framework will “enhance competition within the US market while ensuring US insurers and policyholders are protected against the risk of insolvency”.
They will also set up a new entity called the Reinsurance Supervision Review Department, which will decide which non-US jurisdictions can enter into mutual recognition agreements.
Non-US reinsurers could then be certified to access the US market through one jurisdiction, referred to as the reinsurer’s “port of entry”.