Insurers say proposed California “credit for reinsurance” regulations could put some domestic companies and some licensed companies in California at a competitive disadvantage. [@@]
Today, all states operate under the National Association of Insurance Commissioners, Kansas City, Mo., credit for reinsurance model law, which seeks to prevent insurers from becoming insolvent due to reliance on financially shaky reinsurers.
The proposed new California regulations will set stricter standards for both the state’s domestic companies, and those licensed companies that have at least 20% of their business in the state.
Mike Koziol of the Property Casualty Insurers Association of America, Des Plaines, Ill., says the proposed rule will put additional burdens and costs on insurers wanting to do business in California. “It will make it hard for domestics because they will be held to a higher standard that even some foreign (out of state) that want to do business in California,” he says.