The Property Casualty Insurers Association of America (PCI) testified before the National Association of Insurance Commissioners’ (NAIC) Reinsurance Task Force regarding the exposure drafts of proposed amendments to the NAIC Model Credit for Reinsurance Law and Model Credit for Reinsurance Regulation. The following statement can be attributed to PCI's David Kodama, senior director, research and policy analysis.
“PCI Senior Counsel Robert Woody testified today before the NAIC Reinsurance Task Force in response to proposed changes to NAIC model law and regulation related to credit for reinsurance. These changes would significantly impact the collateral requirements for non-US reinsurers that safeguard the reinsurance obligations due to US ceding insurers, reducing posted reinsurer collateral to 0% on most of the largest reinsurers.
“Woody emphasized six areas of import that the Task Force should consider before the proposed changes are advanced to the NAIC Financial Condition (E) Committee. These include: 1) a less generous adjustment to the collateral sliding scale; 2) mandatory use of interactive financial strength ratings; 3) filing of quarterly SAP financial filings; 4) 100% collateral requirements for solvent schemes of arrangement; 5) development of specific factors for assessing slow paying reinsurers; 6) a 30-day notice requirement any application for reduced collateral.
“PCI applauds the Task Force's effort to duly respond to the pending international debate involving global trade practices and looks forward to supporting the continued strength of financial protection so expected by insurers' policyholders and stakeholders.”
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $174 billion in annual premium, 37.1 percent of the nation’s property casualty insurance. Member companies write 43.1 percent of the U.S. automobile insurance market, 30.6 percent of the homeowners market, 35 percent of the commercial property and liability market, and 41.5 percent of the private workers compensation market.