The executive committee of the National Association of Insurance Commissioners (NAIC) has adopted the XXX/AXXX Reinsurance Framework, which furthers plans to develop proposed changes to the insurer/captive regulations specific to XXX and AXXX transactions.
The NAIC has stated that the XXX/AXXX Reinsurance Framework will not change the statutory reserve requirements, though it will change what types of assets or securities are needed to back the reserve liabilities.
The framework will also require the ceding company to disclose the assets and securities used to support the reserves and hold a risk-based capital (RBC) cushion if the captive does not file RBC.
“The XXX/AXXX Reinsurance Framework is an important regulatory initiative, and this adoption will allow us to move expeditiously to develop a comprehensive framework proposal,” said Adam Hamm, NAIC president and North Dakota insurance commissioner.
With this adoption, numerous groups will develop the details to create the framework for subsequent consideration by the entire NAIC membership.
