The National Association of Insurance Commissioners (NAIC) is advocating for more flexibility for its regulated U.S. insurers to operate both subsidiaries and branches in foreign countries without international supervision favoring the former over the latter.
The NAIC is concerned, for example, that the international regulatory community has stated that the lack of a board of directors at the branch level may limit the host supervisor's ability to manage governance arrangements effectively.
The International Association of Insurance Supervisors (IAIS) recently released an issues paper, Supervision of Cross-border Operations Through Branches, and although the industry feels it is much milder than earlier drafts, both the NAIC and industry still want the paper to reflect a more balanced, flexible approach so branches aren't discredited.
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