Reinsurance agreements (R 2021-05)

The National Association of Insurance Commissioners (NAIC) recently adopted two revisions to its Credit for Reinsurance Model Law. The amendments to the model law incorporate provisions of an agreement between the United States and the European Union (EU). The agreement eliminates reinsurance collateral and local presence requirements for EU reinsurers that maintain $250 million of their own funds and 100% solvency capital. U.S. reinsurers that maintain similar capital and surplus would not be required to maintain a local presence in order to do business in the EU or in any EU jurisdiction. A similar agreement was signed with the United Kingdom and extends similar treatment to qualified jurisdictions and accredited NAIC jurisdictions. SB 5048 (leg.wa.gov) passed this past legislative session incorporating key components of the NAIC model. The commissioner is considering rulemaking to further align with the model law.