Where, exactly, is the US in its rules regarding credit for reinsurance?
Quick Summary of Current Status
Insurance regulators in the US have until September 22, 2022, to adopt regulatory provisions that implement the requirements of the two Covered Agreements the US has entered into with, respectively, the European Union and the United Kingdom. If the US regulators do not implement the necessary provisions by that time, the US federal government is authorized to preempt state rules, as necessary, to bring the US into compliance with its commitments under the Covered Agreements.
After many months of drafting and revision, numerous public comments, a hearing and extensive industry comment letters, it looks as if the US regulatory community is nearing the end zone for making the regulatory changes necessary required under the Covered Agreements. On May 1, 2019, the NAIC Reinsurance Task Force exposed another round of proposed changes to the existing NAIC Credit for Reinsurance Model Law (#785) and Model Regulation (#786). After additional comment letters and discussion, the Task Force approved those changes on May 28, 2019. The comprehensive set of amendments to the Credit for Reinsurance model law and model regulation are scheduled to be acted upon by the NAIC Executive Committee and Plenary on June 25, 2019.
Assuming the new language is approved when it is considered in June, the model law and regulation will then be available for individual states to adopt. Adoption by all impacted US jurisdictions will move the ball over the goal line for US regulators and extinguish the specter of federal preemption on issues under the Covered Agreements. Redline text of the pending amendments to the NAIC Credit for Reinsurance Model Law #785 and Model Regulation #786 is available at the NAIC E Committee Reinsurance Task Force section of the NAIC website.