On November 28, 2012, the Qualified Jurisdiction Drafting Group (the “Drafting Group”) of the NAIC’s Reinsurance Task Force exposed a draft document regarding the NAIC Process for Developing and Maintaining the List of Qualified Jurisdictions under the revised NAIC Credit for Reinsurance Model Law and Regulation (the “NAIC Reinsurance Model Law and Regulation”). The Drafting Group is developing a documented evaluation process for creating and maintaining the NAIC’s list of “qualified jurisdictions” from which reinsurers will be able to apply to qualify as “certified reinsurers” and thus be eligible to post less than 100% collateral as permitted under the revised NAIC Reinsurance Model Law and Regulation. Comments on the draft document were due by March 22, 2013.
During a conference call on March 6, 2013, the Drafting Group discussed a possible expedited review process to identify certain “conditionally qualified jurisdictions”. Expedited review would allow several major jurisdictions to become qualified relatively quickly, albeit on a conditional basis pending the completion of the formal qualification process, and would, in turn, allow reinsurers from such jurisdictions to apply for reduced collateral eligibility. In the absence of such an expedited review, it could take a fairly long time for a jurisdiction to complete the qualification process.
At this time, the Drafting Group has proposed that Bermuda, Germany, Switzerland and the United Kingdom should be among the jurisdictions considered for the proposed expedited conditional qualification process. During the March 6th conference call, certain interested parties suggested that France and Japan also be considered for expedited review. The Drafting Group has noted that the completion of the qualified jurisdictions list is a high priority for the NAIC in 2013. The Drafting Group has stated that it intends to distribute an updated draft of the full evaluation process document in advance of the NAIC Spring National Meeting.