A number of industry groups and interested parties have issued statements responding to the adoption of the Reinsurance Regulatory Modernization Framework Proposal (“Proposal”) at the NAIC Winter National Meeting.
Several parties, including the European Union, the Reinsurance Association of America (“RAA”), and Lloyd’s welcomed the NAIC's adoption of the Proposal as they believe it will help create a level playing field between domestic and foreign reinsurers, which they believe, in turn, will lower costs for consumers. The RAA also went on to emphasize that the “use of federal-enabling legislation . . . will be crucial to achieving the necessary uniformity” as states implement the Proposal.
Other parties, such the National Conference of Insurance Legislators (“NCOIL”) generally support the Proposal, but are concerned about the use of federal enabling legislation as they believe it could lead states down the path to oversight by a federal regulator. Some parties believe that insurance is best regulated at the state level. See our December 8, 2008 blog post which summarizes NCOIL’s concerns.
At least one party, the American Insurance Association (“AIA”), opposes the Proposal. In a December 3, 2008 release, Steven Bennett, AIA assistant general counsel, said “Now is the wrong time to modify the current collateral rules and increase the uncertainty that U.S. insurers will receive prompt and appropriate payments of amounts due under contracts with alien reinsurers.” According to a related release issued by the National Association of Professional Insurance Agents, Dave Snyder, AIA vice president and assistant general counsel, stated that “we [the AIA] will fight this in the states and certainly at the federal level because we believe that this is not in the interests of the U.S.”