Regulations for finite reinsurance transactions were among the items adopted by the National Association of Insurance Commissioners during a conference call today.
Finite reinsurance and other issues were supposed to be addressed during the fall meeting of the NAIC, which was scheduled to be held in New Orleans. However, Hurricane Katrina forced the cancellation of the meeting.
Al Gross, director of the Virginia insurance bureau, urged adoption of disclosure requirements for finite reinsurance. Mr. Gross described how finite reinsurance could be a legitimate form of risk transfer.
Finite reinsurance has come under regulatory scrutiny since state and federal investigators began uncovering instances of improper accounting where certain deals did not actually involve risk transfer and served as a means of improperly improving companies' financial statements.
Mr. Gross described the controversy over the effect of finite deals on accounting practices. The disclosure requirements, which were adopted, will include interrogatories which will help ensure they are used properly, he added.
For instance, he said that a company would have to attest there are adequate controls regarding finite reinsurance.
New York regulators indicated they had withdrawn their own finite reinsurance requirements in anticipation of the adoption of NAIC disclosure measures. The motion passed unanimously.
Also among the items adopted during the executive/plenary call was the Public Adjuster Licensing model act. The measure passed with one dissenting vote from California.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
