The Financial Regulation Standards and Accreditation (F) Committee of the National Association of Insurance Commissioners (NAIC) has unanimously adopted proposed revisions to the Part A: Laws and Regulations Accreditation Preamble.
The proposed revisions will add certain captive insurers and special purpose vehicles (SPVs) into the accreditation programme.
Specifically, the revisions will include regulation of those captives and SPVs that assume XXX or AXXX business, variable annuities and long-term care business. Currently, regulation of these types of companies is not included in the programme's scope.
“This is a critical step forward in the NAIC's work related to the transparency of information and consistency of treatment for these types of captive insurers,” said NAIC president-elect and Missouri insurance director John Huff, who also serves as the chair of the F Committee.
“I look forward to continuing our work to strengthen the accreditation programme."
The F Committee plans to consider specific grandfathering provisions for transactions already in place as well as the effective date of the proposed revisions at the NAIC's 2015 Summer National Meeting.
If the grandfathering provisions and effective dates are adopted, they will then be presented to the NAIC Executive Committee and Plenary for consideration.
The Captive Insurance Companies Association (CICA) expressed its objection to the revisions last year, claiming they would sweep up captives engaged in writing property/casualty risk.
CICA said at the time: “The proposed [multi-state reinsurer] definition is vague and, in some instances, contradictory.”
“No bases have been put forward as to why the proposal should apply to the entire captive industry”.
