The National Association of Insurance Commissioners (NAIC) has adopted both the Revised Insurance Holding Company System Regulatory Act and Actuarial Guideline 48 (AG48), while also approving seven foreign supervisory authorities as qualified jurisdictions.
“The adoption of these components supports our 2014 key initiatives and is the result of truly outstanding work by America’s state insurance regulators,” said Adam Hamm, NAIC President and North Dakota Insurance Commissioner.
“The Revised Insurance Holding Company System Regulatory Act demonstrates our commitment to international standards, while AG48 furthers our objectives of transparency and uniformity related to the regulation of life insurer-owned captives.”
The Revised Insurance Holding Company System Regulatory Act updates the original model to clarify the group-wide supervisor for a defined class of internationally active insurance groups.
It also outlines the process for determining the lead state for domestic insurance groups, outlines the activities the commissioner may engage in as group-wide supervisor, and extends confidentiality protections to cover information received in the course of group-wide supervision.
In adoption of AG48, the NAIC established national standards regarding XXX/AXXX captive reinsurance transactions.
This guidance includes regulation of the types of assets held in backing insurer’s statutory reserve. AG48 is scheduled to take effect in 2015.
Four of the seven countries to be eligible for reinsurance collateral reduction as an approved qualified jurisdiction (Bermuda, Germany, Switzerland and the UK) were previously on the NAIC’s List as conditional qualified.
As of 1 January 2015, these four plus Japan, Ireland and France will be fully qualified jurisdictions subject to a 5-year term before reconsideration.
