The New York State Insurance Department is still deciding what life and health insurers should do about vowing for the validity of reinsurance arrangements.[@@]
The New York department has announced that it will drop its own reinsurance attestation rules once property-casualty insurers file their 2005 annual statements.
But the New York department says of the attestation rules for life and health insurers only that the rules are “under review.”
The New York department issued its own attestation rules, in Circular Letter Number 8 (2005), in response to concerns about “finite reinsurance” arrangements, or arrangements that blend traditional reinsurance of underwriting risk with transactions that are supposed to transfer economic risk.
Regulators around the country are looking to see whether the arrangements really transfer economic risk or merely help insurers adjust the numbers in their financial statements.
In March, New York Insurance Superintendent Howard Mills wrote in Circular Letter Number 8 that letter chief executive officers of all authorized New York state insurers undergoing examinations should attest, under penalty of perjury, that no separate oral or written agreements would reduce any losses associated with any reinsurance contracts.
Circular Letter Number 8 also required chief executives of insurers being examined to attest that their companies had appropriate documentation to show that any reinsurance contracts really did transfer economic risk.
Since then, the blanks working group at the National Association of Insurance Commissioners, Kansas City, Mo., has developed rules requiring insurers to disclose information about reinsurance arrangements in annual statements and requiring insurer CEOs and chief financial officers to attest to the validity of the disclosures.
Mills has responded by issuing a new guidance, in the form of a supplement to Circular Letter Number 8 (2005).
In the new guidance, Mills says the New York department will drop its own attestation requirement for property-casualty insurers once the insurers file their 2005 annual reports.
Until those reports are filed, property-casualty insurer CEOs still must attest to the validity of reinsurance arrangements, Mills writes in the new supplement.
Life insurers should follow the requirements in 2 established guides to life reinsurance reporting, Statement of Statutory Accounting Principles Number 61 and state Regulation 102, Mills writes.