JLT Insurance Management (JLTIM) has joined with the Captive Insurance Companies Association (CICA) and the captive industry in calling for the National Association of Insurance Commissioners (NAIC) to reconsider its proposed definition of "Multi-State Reinsurer".
While the proposal is designed to address supposed issues with life insurer-owned reinsurance captives used for XXX reinsurance, it will snare in its net any captive insuring non-domiciliary risks in any state other than its own domicile.
CICA has encouraged captives and onshore captive associations to send a template letter to state regulators that says, in part, “the NAIC Policy Statement on multi-state domestic insurers currently excludes captives (insurers that are licensed in only their state of domicile but assuming business from insurers writing that business that is directly written in a different state).”
The proposed definition could, intentionally or unintentionally, include all captives.
Len Crouse, a JLTIM Principal for US operations and former Vermont captive regulator, said: “For years, state insurance departments have done a good job regulating captives. I don’t see the need for additional regulation, but this proposed definition could unnecessarily burden captives.”
Proponents of the proposed definition argue that it only addresses multi-state reinsurance captives. However, others insist that the definition could easily include all captives, bringing an unmanageable and costly layer of additional regulation.
