The NAIC’s Financial Condition (E) Committee has created the Captive and Special Purpose Vehicle Use (E) Subgroup. The Subgroup’s charge is to study insurers’ use of captive reinsurers and special purpose vehicles to transfer insurance risk, other than self-insured risk, in relation to existing state laws and regulations, and to establish appropriate regulatory requirements to address concerns identified in the study. Such regulatory requirements may involve modifications to existing NAIC model laws and/or the generation of a new NAIC model law.
In January 2012 the Subgroup issued a Request for Comment to the 50 states and the District of Columbia covering a number of questions relating to the regulation and use of captives and special purpose vehicles. The results from the 31 responding regulators are available on the NAIC website. The Subgroup has prepared a corresponding Request for Comment aimed at individual insurance companies addressing their use of captives and special purpose vehicles. The Subgroup’s work plan also includes the drafting of a White Paper on captives and special purpose vehicles, with exposure targeted for late July 2012.